EXHIBIT 10.12
SECOND AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of January 17, 2003
Among
THE BON-TON RECEIVABLES PARTNERSHIP, L.P.,
as Seller
THE BON-TON RECEIVABLES PARTNERSHIP, L.P.,
as Collection Agent
FALCON ASSET SECURITIZATION CORPORATION
and
EAGLEFUNDING CAPITAL CORPORATION,
as Conduits
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Investors
BANK ONE, NA
and
FLEET SECURITIES, INC.,
as Managing Agents
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
TABLE OF CONTENTS
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES......................................................... 1
ARTICLE II REPURCHASE RIGHT........................................................................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES............................................................. 9
ARTICLE IV CONDITIONS OF PURCHASES.................................................................... 14
ARTICLE V COVENANTS.................................................................................. 16
ARTICLE VI ADMINISTRATION AND COLLECTION.............................................................. 25
ARTICLE VII TERMINATION EVENTS......................................................................... 28
ARTICLE VIII INDEMNIFICATION............................................................................ 30
ARTICLE IX THE AGENT.................................................................................. 34
ARTICLE X ASSIGNMENTS; PARTICIPATIONS................................................................ 37
ARTICLE XI MISCELLANEOUS.............................................................................. 38
SECOND AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
This Second Amended and Restated Receivables Purchase
Agreement dated as of January 17, 2003 is among The Bon-Ton Receivables
Partnership, L.P., a Pennsylvania limited partnership ("TBTR Partnership", the
"Seller" and the "Collection Agent"), BTRGP, Inc. ("GP, Inc."), a Pennsylvania
corporation, each financial institution party hereto as an Investor (the
"Investors"), Falcon Asset Securitization Corporation ("Falcon") and
EagleFunding Capital Corporation ("Eagle"), as Conduits (the "Conduits"), Bank
One, NA (Main Office Chicago) ("Bank One") and Fleet Securities, Inc. ("Fleet
Securities"), as Managing Agents (the "Managing Agents"), and Bank One, as Agent
(the "Agent"). Unless defined elsewhere herein, capitalized terms used in this
Agreement, except for those used in connection with Section 7.1(i), shall have
the meanings assigned to such terms in Exhibit I. Capitalized Terms used in
connection with Section 7.1(i) shall have the meanings assigned to such terms in
Exhibit X.
PRELIMINARY STATEMENTS
The Seller, The Bon-Ton Receivables Corp., GP, Inc., Falcon,
and Bank One, as an Investor and as Agent, and the other financial institutions
party thereto as Investors are parties to that certain Amended and Restated RPA
dated as of June 12, 1995 (as amended prior to the date hereof, the "Existing
RPA").
The parties hereto desire to enter into this agreement in
order, among other things, to amend and restate the Existing RPA in its
entirety.
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility. (a) Upon the terms and subject
to the conditions hereof, the Seller may, at its option at any time prior to the
Facility Termination Date, sell and assign Receivable Interests to the Agent for
the benefit of the Purchasers. Each Conduit may, at its option, instruct its
related Managing Agent to purchase on its behalf or, if such Conduit shall
decline to purchase, such Managing Agent shall purchase on behalf of the
Investors in its Purchase Group, Receivable Interests offered by the Seller for
sale and assignment from time to time during the period from the date hereof to
but not including the Facility Termination Date. Effective on the payment of the
applicable Purchase Price in respect of each Incremental Purchase, the Seller
assigns, transfers and conveys to the Agent for the benefit of the relevant
Purchaser or Purchasers, and the Agent thereby acquires all of the Seller's
right, title and interest in and to the Receivable Interests arising from such
Incremental Purchase.
(b) The Seller may, upon at least five days' notice to the
Agent and each Managing Agent, terminate in whole or reduce in part ratably
among the Investors the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be
in an amount not less than $5,000,000 and any reduction of the Purchase Limit
shall not cause the Purchase Limit to be an amount less than $120,000,000.
Section 1.2. Making Purchases. (a) The Seller shall provide
the Agent and each Managing Agent with at least three Business Days' prior
notice (a "Purchase Notice") of each Incremental Purchase. Each Purchase Notice
shall, except as set forth below, be irrevocable and shall specify the requested
Purchase Price (the pro rata share of which, with respect to each Investor in
each applicable Purchase Group shall not be less than $1,000,000) and date of
purchase, together with the duration of the initial Tranche Period and the
initial Discount Rate related thereto. Following receipt of a Purchase Notice,
each Managing Agent will determine whether the Conduit(s) in its Purchase Group
agree to make the purchase. If any Conduit declines to make a proposed purchase,
the Seller may cancel the Purchase Notice in its entirety or, in the absence of
such a cancellation, the Incremental Purchase of the Receivable Interests will
be made by the Investors in such Conduit's Purchase Group.
(b) On the date of each Incremental Purchase, upon
satisfaction of the applicable conditions precedent set forth in Article IV,
each Conduit or the applicable Investors, as applicable, shall deposit to the
Facility Account, in immediately available funds, no later than 11:00 a.m.
(Chicago time), an amount equal to (i) in the case of a Conduit, the aggregate
Purchase Price of the Receivable Interests that are being purchased on behalf of
such Conduit or (ii) in the case of an Investor, such Investor's Commitment Pro
Rata Share of the aggregate Purchase Price of the Receivable Interests that are
being purchased on behalf of the Investors.
Section 1.3. Selection of Tranche Periods and Discount Rates.
(a) Each Receivable Interest shall at all times have an associated amount of
Capital, a Discount Rate and Tranche Period applicable to it. Not less than
$1,000,000 of Capital may be allocated to any single Receivable Interest with
respect to which a LIBO Rate applies. The Seller shall request Discount Rates
and Tranche Periods for the Receivable Interests of the Purchasers. The Seller
may select the CP Rate, with the concurrence of the applicable Managing Agent,
or the Base Rate for the Receivable Interests of any Conduit and the LIBO Rate
or the Base Rate for the Receivable Interests of the Investors. The Seller shall
by 11:00 a.m. (Chicago time), (i) at least three Business Days prior to the
expiration of any then existing Tranche Period with respect to which the LIBO
Rate is being requested as a new Discount Rate, (ii) at least two Business Days
prior to the expiration of any then existing Tranche Period with respect to
which the CP Rate is being requested as a new Discount Rate and (iii) at least
one Business Day prior to the expiration of any Tranche Period with respect to
which the Base Rate is being requested as a new Discount Rate, give the
applicable Managing Agent irrevocable notice of the new Tranche Period and
Discount Rate for the Receivable Interest associated with such expiring Tranche
Period. If the Seller fails to request a new Discount Rate and/or a new Tranche
Period for any Receivable Interest pursuant to the terms of this Section 1.3,
the Discount Rate shall be the CP Rate or the Base Rate, in the applicable
Managing Agent's sole discretion, and the applicable Tranche Period shall be a
period of one day commencing on the last day of the then expiring Tranche Period
for such Receivable Interest. Until the Seller gives notice to the applicable
Managing Agent of another Discount Rate, the initial Discount Rate for any
Receivable Interest transferred to the Investors shall be the Base Rate and the
Tranche Period for such Receivable Interest shall
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be a period of five days commencing on the day that such Receivable Interest is
transferred to such Investors.
(b) If any Investor notifies the applicable Managing Agent
that it has determined that funding its Commitment Pro Rata Share of the
Receivable Interests of the Investors at a LIBO Rate would, by reason of any
Regulatory Change after the date hereof, violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or that (i)
deposits of a type and maturity appropriate to match fund its Receivable
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Receivable Interest at
such LIBO Rate, then such Managing Agent shall suspend the availability of such
LIBO Rate and require the Seller to select a new Discount Rate for any
Receivable Interest accruing Discount at such LIBO Rate.
(c) Notwithstanding any other provision herein to the
contrary, from and after the occurrence, and during the continuance, of a
Default Pricing Event, until the Aggregate Unpaids have been indefeasibly paid
in full, the Discount Rate applicable to all Receivable Interests shall be a
rate per annum equal to the Base Rate plus 2%. "Default Pricing Event" shall
mean (i) any Termination Event of the type described in Section 7.1(a)(ii)
(other than a Termination Event arising thereunder in respect of any payment due
under Article VIII) or Section 7.1(c), and (ii) any other Termination Event,
provided that under this clause (ii) the Agent or any Managing Agent shall have
declared (by written notice given to the Seller) the existence of such
Termination Event and a period of five days shall have elapsed.
Section 1.4. Percentage Evidenced by Receivable Interests. (a)
Each Receivable Interest shall be initially computed on its date of purchase.
Thereafter, until its Liquidation Day, each Receivable Interest shall be
automatically recomputed (or deemed to be recomputed) on each day prior to its
Liquidation Day. The variable percentage represented by any Receivable Interest
as computed (or deemed recomputed) as of the close of business on the day
immediately preceding its Liquidation Day shall remain constant at all times
after such Liquidation Day.
(b) If any Receivable Interest would otherwise be reduced or
increased on any day as a result of newly arising Collections or Receivables,
the Agent may prevent such increase or reduction by notifying the Collection
Agent on such day that the Net Receivables Balance for such Receivable Interest
will include only the number or portion of Receivables or Collections arising on
such day as shall cause the percentage evidenced by such Receivable Interest to
remain constant. The remainder of the Receivables, Collections or portion
thereof arising on such day shall be treated as arising on the next succeeding
Business Day.
(c) If any reduction of any Receivable Interest hereunder
affects a reduction in Capital, and if such reduction in Capital reduces
aggregate Capital below the aggregate "Notional Amounts" of the Interest Rate
Swap Agreements, then at the discretion of Bank One, NA, in its role as Swap
Counterparty, or such other Swap Counterparty as may from time to time be party
to an Interest Rate Swap Agreement, any such Interest Rate Swap Agreement shall
be deemed terminated pursuant to Section 6 thereof, and any Interest Rate Swap
Obligations (including Breakage Fees), Swap Fees or any other amounts due under
such Interest Rate Swap Agreement shall immediately be due and owing; provided
that, at the discretion of such Swap Counterparty, the Seller may enter into a
replacement Interest Rate Swap Agreement allocated to
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such reduced Receivable Interest with a "Notional Amount" less than or equal to
such reduced Capital.
Section 1.5. Dividing or Combining Receivable Interests. The
Seller or any Managing Agent may, upon notice to and consent by the other
received at least three Business Days prior to the end of a Tranche Period for
any Receivable Interest, take any of the following actions with respect to any
related Receivable Interest: (i) divide such Receivable Interest into two or
more Receivable Interests having aggregate Capital equal to the Capital of such
divided Receivable Interest, (ii) combine such Receivable Interest with another
Receivable Interest with a Tranche Period ending on the same day and owned by
the related Conduit, creating a new Receivable Interest having Capital equal to
the Capital of the two Receivable Interests combined or (iii) combine the
Receivable Interest with a Receivable Interest to be purchased on such day by a
related Purchaser, creating a new Receivable Interest having Capital equal to
the Capital of the two Receivable Interests combined, provided that, a
Receivable Interest of a Conduit may not be combined with a Receivable Interest
of any Investor.
Section 1.6. Reinvestment Purchases. At any time that any
Collection or Collections are received by the Collection Agent after the initial
purchase of a Receivable Interest hereunder and on or prior to the Liquidation
Day of such Receivable Interest (and subject to the provisions of Section 1.8
hereof), the Seller hereby requests and the Purchasers hereby agree to make,
simultaneously with such receipt, a reinvestment (each a "Reinvestment") with
that portion of each and every Collection received by the Collection Agent that
is allocable to such Receivable Interest, such that after giving effect to such
Reinvestment, the amount of the Capital of such Receivable Interest immediately
after any such receipt and corresponding Reinvestment shall be equal to the
amount of the Capital immediately prior to such receipt; provided that, a
Conduit (or its Managing Agent on its behalf) may at any time notify the Seller
that it will cease to make Reinvestment Purchases and such Conduit shall
thereafter cease to make such Reinvestment Purchases. If any Conduit notifies
the Seller that it will cease to make Reinvestment Purchases and such Conduit
thereafter ceases to make a Reinvestment Purchase, Seller may deliver a Purchase
Notice, as defined in Section 1.2, to such Conduit's related Managing Agent, and
the Investors in such Conduit's Purchase Group shall, subject to the other terms
and conditions of this Agreement, make a new purchase of Receivable Interests by
the third Business Day following such Purchase Notice in an amount equal to the
Reinvestment Purchase that such Conduit declined to make (which amount shall be
set forth in such Purchase Notice).
Section 1.7. Full Liquidation Settlement Procedures. On the
Liquidation Day and on each day thereafter, the Collection Agent (or, if
applicable, the Agent) shall set aside and hold in trust for the Purchasers, the
Allocation Percentage of Collections received on such day. On the first Business
Day of each calendar month, the Collection Agent shall remit to the Subservicer,
so long as the Subservicer is not the Originator or any Affiliate thereof, any
accrued and unpaid Subservicer Fee then due and payable. On the last day of each
Tranche Period of a Receivable Interest after the occurrence of its Liquidation
Day, the Collection Agent shall remit (a) first, to the Subservicer, so long as
the Subservicer is not the Originator or any Affiliate thereof, any Subservicer
Fee due but unpaid on the first Business Day of the immediately preceding
calendar month, (b) second, to the Agent, all unreimbursed Collection and
4
Enforcement Costs, and (c) third, to each Managing Agent for the account of the
Purchasers in such Managing Agent's Purchase Group (ratably based upon
outstanding amounts) any remaining amounts set aside pursuant to the first
sentence hereof together with any remaining amounts set aside pursuant to this
Section 1.7 prior to such day, but not to exceed the sum of (i) the accrued
Discount for such Receivable Interest, (ii) the Capital of such Receivable
Interest, and (iii) the aggregate of all other amounts then owed hereunder by
Seller to Purchasers or the related Managing Agent. If there shall be
insufficient funds on deposit for the Collection Agent to distribute funds in
payment in full of the aforementioned amounts, such amounts shall be allocated
amongst the Managing Agents based upon the Funded Pro Rata Share of the
Purchases in each Purchasing Group. The Collections so remitted shall be
allocated by the related Managing Agent to the Receivable Interests of the
Purchasers in such Managing Agent's Purchase Group in accordance with the
Capital allocable to each, as between the Conduit in such Managing Agent's
Purchase Group and all other Purchasers in such Managing Agent's Purchase Group,
and ratably in accordance with the Commitment allocable to each, as among the
Investors in such Managing Agent's Purchase Group. If there shall be
insufficient funds on deposit for the related Managing Agent to distribute funds
remitted by the Collection Agent, in payment in full of the aforementioned
amounts, such related Managing Agent shall distribute funds first, to
reimbursement of such Managing Agent's Collection and Enforcement Costs, second,
in payment of all accrued Discount for the Receivable Interests, third, in
reduction of the Capital of the Receivable Interests, and fourth, in payment of
all other amounts payable to the Purchasers in such Managing Agent's Purchase
Group. Collections applied to the payment of fees, expenses, Discount and all
other amounts payable by the Seller to any Managing Agent and the Purchasers in
such Managing Agent's Purchase Group hereunder shall be allocated ratably among
such Managing Agent and such Purchasers in accordance with the amounts owing to
each. Following the date on which the Aggregate Unpaids are reduced to zero, the
Collection Agent shall pay to Seller any remaining Collections set aside and
held by the Collection Agent pursuant to this Section 1.7.
Section 1.8. Partial Liquidation Settlement Procedures. If,
pursuant to Section 1.13, certain Investors have agreed to an extension of their
respective Liquidity Termination Dates and at least one Investor has not agreed
to such extension (each such Investor, a "Non-Renewing Investor"), on each day
on and after such Non-Renewing Investor's Liquidity Termination Date until the
Capital of each Non-Renewing Investor has been reduced to zero and the Capital
held by each Conduit in such Non-Renewing Investor's Purchase Group (any such
Conduit, a "Non-Renewing Conduit") has been reduced to an amount equal to or
less than the aggregate Commitments of the Investors in its Purchase Group
(exclusive of any Non-Renewing Investor) the Collection Agent shall set aside
and hold in trust for each such Non-Renewing Investor and Non-Renewing Conduit,
the ratable share of Collections calculated (and not re-calculated subsequently)
based on the outstanding Capital of such Non-Renewing Investor(s) and
Non-Renewing Conduit(s) relative to the aggregate Capital of all Purchasers on
such Non-Renewing Investor(s)' Liquidity Termination Date. On the last day of
each Tranche Period of a Receivable Interest held by a Non-Renewing Investor or
Non-Renewing Conduit, the Collection Agent shall remit to the applicable
Managing Agent for the account of the Non-Renewing Investors and Non-Renewing
Conduit(s) in such Managing Agent's Purchase Group (ratably based upon
outstanding amounts) the amounts set aside pursuant to the preceding sentence
together with any remaining amounts set aside pursuant to this Section 1.8 prior
to such day with
5
respect to such Receivable Interest, but not to exceed in the case of any
Non-Renewing Conduit, an amount equal to the excess, if any, of Capital of such
Non-Renewing Conduit over the aggregate Commitments of the Investors in its
Purchase Group (exclusive of any Non-Renewing Investor), and not to exceed in
any case the Capital of such Receivable Interest; provided that, if on any such
Business Day, there shall be two or more Non-Renewing Investors with different
Liquidity Termination Dates and the balance of such Collections is less than the
aggregate of the above-described amounts (the "Initial Calculated Amount") for
such Non-Renewing Investors (and any related Non-Renewing Conduit(s)), such
Collections shall be distributed ratably among such Non-Renewing Investors (and
any related Non-Renewing Conduit(s)) based upon their respective Initial
Calculated Amounts and provided, further, that notwithstanding the foregoing, if
the Liquidation Day shall occur, this Section 1.8 shall be inapplicable and
Collections shall be distributed in accordance with Section 1.7.
Section 1.9. Deemed Collections. If on any day the Outstanding
Balance of, or Accrued Finance Charges in respect of, a Receivable is either (x)
reduced as a result of any defective or rejected goods or services, any cash
discount or any adjustment by the Seller, the Collection Agent (if then any
Person designated by the Seller is Collection Agent) or the Originator (or, if
other than the Originator, the originator of such Receivable), or (y) reduced or
cancelled as a result of a setoff in respect of any claim by any Person (whether
such claim arises out of the same or a related transaction or an unrelated
transaction and whether such claim relates to the Seller, the Originator (or, if
other than the Originator, the originator of such Receivable) or any Affiliate
thereof), the Seller shall be deemed to have received on such day a Collection
of such Receivable in the amount of such reduction or cancellation. If on any
day any of the representations or warranties in Article III are no longer true
with respect to a Receivable, the Seller shall be deemed to have received on
such day a Collection of such Receivable in full. If the Seller receives any
Collections or if the Seller is deemed to have received Collections pursuant to
this Section 1.9 or otherwise, the Seller shall within one Business Day pay such
Collections or Deemed Collections to the Collection Agent and, at all times
prior to such payment, such Collections shall be held in trust by the Seller,
for the exclusive benefit of the Purchasers, the Managing Agents with respect to
such Purchasers and the Agent.
Section 1.10. Discount; Payments and Computations, Etc. (a)
Discount shall accrue for each Receivable Interest for each day occurring during
the Tranche Period for such Receivable Interest. On the last day of each Tranche
Period the Seller shall pay to each Managing Agent an amount equal to the
accrued and unpaid Discount in respect of each Receivable Interest held by the
Purchasers in such Managing Agent's Purchase Group for the immediately preceding
Tranche Period, as notified by such Managing Agent to the Seller on or prior to
the last day of such Tranche Period.
(b) Notwithstanding any limitation on recourse contained in
this Agreement, the Seller shall pay the Agent and each Managing Agent, for the
account of the relevant Purchasers in such Managing Agent's Purchaser Group,
such fees as set forth in the Fee Letter (which fees shall be sufficient, the
Investors agree among themselves, to pay the "Investors Fees") and such
Purchaser's share of all amounts payable as Discount, all amounts payable
pursuant to Article VIII, if any, all Collection Agent costs, if any, payable
pursuant to Section 6.2, any and all issuing and paying agent fees and
commissions of placement agents and commercial paper
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dealers in respect of Commercial Paper issued to fund any Receivable Interest of
any Conduit hereunder, and on demand therefor, any early Collection Fee.
(c) All amounts to be paid or deposited by any Person
hereunder shall, unless otherwise expressly specified in this Agreement, be paid
or deposited in accordance with the terms hereof no later than 11:00 a.m.
(Chicago time) on the day when due in immediately available funds; if such
amounts are payable to a Purchaser, they shall be paid to the related Managing
Agent, for the account of such Purchaser, at the address of such Managing Agent
set forth on the signature pages hereto until otherwise notified by such
Managing Agent. Upon notice to the Seller, the Agent may debit the Facility
Account or, solely in the case of Interest Rate Swap Obligations owing to Bank
One the Swap Cash Collateral Account held in the name of Bank One as Swap
Counterparty, for all amounts then due and payable hereunder. In the case of
Interest Rate Swap Obligations owing to a Swap Counterparty other than Bank One
upon notice to the Seller, such Swap Counterparty is authorized to debit the
Swap Cash Collateral Account held by it for all amounts then due and payable
under the Interest Rate Swap Obligations owing to it. All computations of
Discount and per annum fees hereunder and under the Fee Letter shall be made on
the basis of a year of 360 days for the actual number of days elapsed (including
the first but excluding the last day). All per annum fees shall be payable
monthly in arrears on the first day of each month. On each Interest Rate Swap
Settlement Date, the Collection Agent shall direct each Swap Counterparty to
make all payments due under each corresponding Interest Rate Swap Agreement
directly to the Collection Account. If any amount hereunder shall be payable on
a day which is not a Business Day, such amount shall be payable on the next
succeeding Business Day.
Section 1.11. Seller Interest. The Seller shall ensure that
the aggregate Receivable Interests of the Purchasers shall at no time exceed
100%. If at any time, the aggregate Receivable Interests of the Purchasers
exceeds 100%, the Seller shall pay to each Managing Agent for the account of the
Purchasers in such Managing Agent's Purchase Group within the Required Cure
Period, an amount to be applied to reduce the Capital of the Receivable
Interests of each Purchaser in such Managing Agent's Purchase Group, such that
after giving effect to such payment the aggregate Receivable Interest of all
Purchasers equals or is less than 100%. Such amount shall be applied ratably to
the reduction of the Capital of the Receivable Interests. Any amounts received
by the Purchasers pursuant to the preceding sentence shall be applied ratably in
accordance with their Funded Pro Rata Shares. The Seller hereby grants (i) to
the Agent for the ratable benefit of the Agent, the Managing Agents and the
Purchasers a security interest in all of its interest in the Receivables,
Related Security, Collections and proceeds thereof to secure payment of the
Aggregate Unpaids, including the indemnity obligations of the Seller under
Article VIII and all other obligations owed hereunder to the Purchasers, (ii) to
the Agent on behalf of Bank One, as a Swap Counterparty, a security interest in
all of its interest in the Swap Cash Collateral Account held by Bank One, and
all proceeds thereof to secure the Interest Rate Swap Obligations owing to Bank
One, as Swap Counterparty, and (iii) to each Swap Counterparty other than Bank
One, a security interest in all of its interest in the Swap Cash Collateral
Account held by such Swap Counterparty and all proceeds thereof to secure the
Interest Rate Swap Obligations owing to such Swap Counterparty.
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Section 1.12. Characterization. (a) It is the intention of the
parties hereto that each purchase hereunder shall constitute an absolute and
irrevocable sale, which purchase shall provide the applicable Purchaser with the
full benefits of ownership of the applicable Receivable Interest. Except as
specifically provided in this Agreement, each sale of a Receivable Interest
hereunder is made without recourse to the Seller; provided, however, that (i)
the Seller shall be liable to each Purchaser and each Managing Agent for all
representations, warranties and covenants made by the Seller pursuant to the
terms of this Agreement, and (ii) such sale does not constitute and is not
intended to result in an assumption by any Purchaser or any Managing Agent or
any assignee thereof of any obligation of the Seller or the Originator or any
other person arising in connection with the Receivables, the Related Security,
the related Contracts and the Accounts, or any other obligations of the Seller
or the Originator.
(b) If the conveyance by the Seller to the Purchasers of
interests in Receivables hereunder shall be characterized as a secured loan and
not a sale, it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law, and that the Seller shall
have granted to the Agent, for the ratable benefit of the Agent, the Managing
Agents and the Purchasers, a duly perfected security interest in all of the
Seller's right, title and interest in, to and under the Receivables, the
Collections, each Collection Account, each Interest Rate Swap Agreement, all
Related Security, all payments on or with respect to such Receivables, all other
rights relating to and payments made in respect of the Receivables, and all
proceeds of any thereof prior to all other liens on and security interests
therein, and after a Termination Event, the Managing Agents, the Purchasers, and
each Swap Counterparty (with respect to the corresponding Swap Cash Collateral
Account) shall have, in addition to the rights and remedies which they may have
under this Agreement, all other rights and remedies provided to a secured
creditor after default under the UCC and other applicable law (including without
limitation the right to foreclose upon the Receivables, Related Security,
Collections, any Swap Cash Collateral Accounts and proceeds thereof and sell
such collateral following a Termination Event, in each case pursuant to the
requirements of the UCC), which rights and remedies shall be cumulative.
Section 1.13. Extension of Liquidity Termination Date. The
Seller may request that an Investor extend the Liquidity Termination Date (such
date or such date as it may have been previously extended pursuant to this
Agreement is hereinafter referred to as the "Liquidity Termination Date") for
such Investor to the date occurring 364 days (or less) past the then applicable
Liquidity Termination Date for such Investor by giving written notice of such
request (an "Extension Request") to the Managing Agent for such Investor. Such
Extension Request shall be delivered no more than 60 days and no less than 30
days prior to the then applicable Liquidity Termination Date for such Investor.
If the applicable Investor, or its Managing Agent on such Investor's behalf,
advises the Seller in writing by the later of (i) the date that is 30 days prior
to the then applicable Liquidity Termination Date for such Investor and (ii) the
date that is 10 days after such Investor receives an Extension Request (such
later date, the "Reply Date"), that such Investor consents to the requested
extension, the Liquidity Termination Date for such Investor will be the date
following the then applicable Liquidity Termination Date for such Investor that
is specified by such Investor in writing as its new Liquidity Termination Date.
If neither the Investor, nor its Managing Agent on such Investor's behalf,
responds to the Seller's Extension Request by the Reply Date for such Investor,
such Investor will be deemed to have denied the Seller's Extension Request.
Notwithstanding any of the foregoing, an Extension
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Request that is delivered by the Seller to an Investor prior to then applicable
Liquidity Termination Date for such Investor may, with the written consent of
the Seller, be accepted in writing by such Investor at any time prior to the
then applicable Liquidity Termination Date for such Investor; in such case, the
Liquidity Termination Date for such Investor will be the date following the then
applicable Liquidity Termination Date for such Investor that is specified by
such Investor in writing as its new Liquidity Termination Date.
ARTICLE II
REPURCHASE RIGHT
Section 2.1. Seller's Extinguishment. The Seller shall have
the right, on five (5) Business Days' written notice to the Agent, at any time
following the reduction of the Capital to a level that is less than five percent
(5%) of the original Purchase Limit, to repurchase from the Purchasers all, and
not part, of the then outstanding Receivable Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of or against any Purchaser, any Managing Agent or the Agent.
Section 2.2. Swap Cash Collateral Account. Any amounts on
deposit in a Swap Cash Collateral Account in excess of the Required Minimum
Balance related to the applicable Interest Rate Swap Agreement shall be remitted
to the Seller by the Collateral Agent (if both the Collateral Agent and the Swap
Counterparty are Bank One) or otherwise by such Swap Counterparty in each
instance, upon the Seller's request therefor. In addition, the Seller may from
time to time make deposits into the Swap Cash Collateral Accounts in the amount
necessary to maintain funds in such Swap Cash Collateral Accounts in an
aggregate amount at least equal to the applicable Required Minimum Balance for
all Interest Rate Swap Agreements at such time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Seller Representations and Warranties. Each of
the Seller and GP, Inc. hereby represents and warrants to the Agent, the
Managing Agents and the Purchasers that:
(a) Existence and Power. TBTR Partnership is a limited
partnership duly organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania. TBTR Partnership has all partnership power
and all governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is
conducted.
(b) No Conflict. The execution, delivery and performance by
TBTR Partnership of this Agreement and each other Transaction Document to which
it is a party, and TBTR Partnership's use of the proceeds of purchases made
hereunder, are within its partnership
9
powers, have been duly authorized by all necessary partnership action, do not
contravene or violate (i) its certificate of incorporation, by-laws, partnership
agreement or certificate of limited partnership, as applicable, (ii) any law,
rule or regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of the Seller or its
Subsidiaries (except created hereunder); and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law. This Agreement and
each other Transaction Document to be executed and delivered by TBTR Partnership
hereunder has been duly executed and delivered by it.
(c) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
TBTR Partnership of this Agreement, any Collection Account Agreement or any
other Transaction Document to be delivered in connection herewith.
(d) Binding Effect. This Agreement, each Collection Account
Agreement and each of the other Transaction Documents to which TBTR Partnership
is a party constitutes the legal, valid and binding obligation of TBTR
Partnership enforceable against TBTR Partnership in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally.
(e) Accuracy of Information. All information heretofore
furnished by TBTR Partnership to the Agent, any Managing Agent or the Purchasers
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by TBTR
Partnership to the Agent, any Managing Agent or the Purchasers will be, true and
accurate in every material respect, on the date such information is stated or
certified and does not and will not contain any material misstatement of fact or
omit to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(f) Use of Proceeds. No proceeds of any Purchase will be used
(i) for a purpose which violates, or would be inconsistent with, Regulation G,
T, U or X promulgated by the Board of Governors of the Federal Reserve System
from time to time or (ii) to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(g) Title to Receivables Purchased from the Originator. Each
Receivable transferred by the Originator has been purchased by the Seller from
the Originator in accordance with the terms of the Transfer Agreement, and the
Seller has thereby irrevocably obtained legal and equitable title to, and has
the legal right to sell, such Receivable and the Related Security and such
Receivable has been transferred to the Seller free and clear of any Adverse
Claim. Without limiting the foregoing, there has been duly filed all financing
statements or other similar instruments or documents necessary under the UCC of
all appropriate jurisdictions (or any comparable law) to perfect the Seller's
ownership interest in such Receivable.
10
(h) Good Title; Perfection. Immediately prior to each purchase
hereunder, the Seller shall be the legal and beneficial owner of the Receivables
and Related Security with respect thereto, free and clear of any Adverse Claim,
except as created by this Agreement and the documents entered into in connection
herewith. This Agreement is effective to (i) create a valid and perfected first
priority interest in each Swap Cash Collateral Account in favor of the
corresponding Swap Counterparty (or the Collateral Agent on behalf thereof), and
(ii) is effective to, and shall, upon each purchase hereunder, transfer to the
Agent for the benefit of the relevant Purchaser or Purchasers (and the Agent,
for the benefit of such Purchaser or Purchasers shall acquire from the Seller) a
valid and perfected first priority undivided percentage ownership interest in
each Receivable existing or hereafter arising and in the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim, in each
case except as created by this Agreement and the documents entered into in
connection herewith.
(i) Places of Business. The principal places of business and
chief executive office of TBTR Partnership and the offices where TBTR
Partnership as the Seller keeps all its Records are, and have been at all times
since January 1, 1995, located at the address(es) listed on Exhibit II or such
other locations notified to the Agent in accordance with Section 5.2(a) in
jurisdictions where all action required by Section 5.2(a) has been taken and
completed. The jurisdiction of organization, Federal Employer Identification
Number and organizational identification number for TBTR Partnership are each
correctly set forth on Exhibit II.
(j) Collection Accounts. With respect to Collections and the
Collection Accounts:
(i) the Seller has caused the Originator and the Collection
Agent to instruct all Obligors to pay all Collections directly to a
Lock-Box; provided that Obligors may elect to make payments at a store
location of the Originator;
(ii) the Originator has agreed to cause each of its stores (A)
to deposit all In-Store Collections with a local bank within one
Business Day of its receipt thereof, and (B) on the same day as such
deposit, to initiate a remittance to the Concentration Account (through
the automated clearinghouse system or by wire transfer) of all such
In-Store Collections; the Originator has agreed to remit to the
"Sub-Servicer" under the Transfer Agreement, on the date of receipt of
any such In-Store Collections in the Concentration Account, all of such
Collections; the Seller agrees to cause such Sub-Servicer thereupon to
remit the same to the Collection Agent (or shall disburse the same in
the manner and to such Persons as the Collection Agent shall otherwise
direct in accordance with the terms and provisions of this Agreement);
and the Collection Agent, if it receives any of the same, shall apply
such Collections in accordance with Article VI and the other terms and
provisions of this Agreement; provided, however, that neither the
Seller nor the Originator shall be in breach of its obligations under
clause (A) above if an amount not to exceed 5% of the aggregate
In-Store Collections during any month shall fail to be deposited within
one Business Day of the receipt thereof so long as all such In-Store
Collections are deposited within two Business Days of receipt;
(iii) all Collections in the Lock-Boxes are deposited, on the
same Business Day received, directly into a Lock-Box Account and
subsequently (within one Business Day
11
after such deposit) transferred to the Concentration Account and the
Seller shall thereupon make the same available to the Collection Agent
for application in accordance with Article VI and the other terms and
provisions of this Agreement;
(iv) all Lock-Boxes, Lock-Box Accounts and Concentration
Accounts as of the date hereof, together with the account numbers
thereof and the names and addresses of all banks maintaining the same,
are listed on Exhibit III and, with respect to each Collection Account
established after the date hereof, the Seller has provided notice
thereof to the Agent and otherwise complied with all requirements set
forth in Section 5.2(b) with respect thereto;
(v) a Collection Account Agreement in respect of each
Collection Account, in the appropriate form, has been duly executed and
delivered by the applicable Collection Bank, the Originator, the Seller
and the Agent and such Collection Account Agreement remains in full
force and effect.
The Seller has not granted any Person, other than the Agent as contemplated by
this Agreement, dominion and control of any Collection Account, or the right to
take dominion and control of any Collection Account at a future time or upon the
occurrence of a future event.
(k) Material Adverse Effect. Since January 31, 2002, no event
has occurred which would have a Material Adverse Effect.
(l) Names. TBTR Partnership has not used any corporate name,
trade name, or assumed name other than (i) on, or at any time during the five
year period prior to, the date of this Agreement, those listed on Exhibit II and
(ii) after the date of this Agreement any other name in respect of which the
Seller shall have complied with Section 5.2(a).
(m) Actions, Suits. There are no actions, suits or proceedings
pending, or to the knowledge of TBTR Partnership threatened, against or
affecting TBTR Partnership, the Originator, any Subsidiary of the Originator or
The Bon-Ton Stores, Inc., or any of the foregoing's respective properties, in or
before any court, arbitrator or other body, which are reasonably likely to (i)
adversely affect the collectibility of a material portion of the Receivables,
(ii) materially adversely affect the financial condition of TBTR Partnership,
the Originator, any Subsidiary of the Originator or The Bon-Ton Stores, Inc. or
(iii) materially adversely affect the ability of TBTR Partnership to perform its
obligations under the Transaction Documents; neither TBTR Partnership, nor the
Originator, nor any Subsidiary of the Originator nor The Bon-Ton Stores, Inc. is
in default with respect to any order of any court, arbitrator or governmental
body.
(n) Credit and Collection Policies. With respect to each
Receivable, the Collection Agent has complied in all material respects with the
Credit and Collection Policy.
(o) Payments to Originator. The Seller shall have given
reasonably equivalent value to the Originator in consideration for each transfer
to the Seller of Receivables and Related Security under the Transfer Agreement
and each such transfer shall not have been made for or on account of an
antecedent debt owed by the Originator to the Seller and no such transfer is or
may
12
be voidable under any Section of the Bankruptcy Reform Act of 1978 (11
U.S.C. Sections 101 et seq.), as amended.
(p) Ownership of the Seller. The Originator owns all of the
issued and outstanding capital stock of GP, Inc. Such capital stock is validly
issued, fully paid and nonassessable and there are no options, warrants or other
rights to acquire securities of GP, Inc. GP, Inc. is the sole general partner in
TBTR Partnership. The Originator is the sole limited partner in TBTR
Partnership. There are no options, warrants or other rights to acquire any
partnership interests in TBTR Partnership. GP, Inc. and the Originator each
holds its partnership interest in TBTR Partnership free and clear of any Adverse
Claim.
(q) Not an Investment Company. TBTR Partnership is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended from time to time, or any successor statute.
Section 3.2. GP, Inc. Representations and Warranties. GP, Inc.
hereby represents and warrants to the Agent, the Managing Agents and the
Purchasers that:
(a) Corporate Existence and Power. GP, Inc. is a corporation
duly organized, validly existing and in good standing under the laws of its
state of incorporation, and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted.
(b) No Conflict. The execution, delivery and performance GP,
Inc. of this Agreement and each other Transaction Document, in each case for
itself and on behalf of the Seller, are within its corporate powers, have been
duly authorized by all necessary corporate action, do not contravene or violate
(i) its certificate or articles of incorporation or by-laws, (ii) any law, rule
or regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on its assets. This Agreement and
each other Transaction Document to be executed and delivered by GP, Inc., on its
own behalf and on behalf of the Seller, has been duly executed and delivered by
GP, Inc.
(c) Governmental Authorization. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery and performance
by GP, Inc. of this Agreement or any other Transaction Document to be delivered
by it, whether on its own behalf or on behalf of the Seller, in connection
herewith.
(d) Binding Effect. This Agreement and each of the other
Transaction Documents to which GP, Inc., for itself or on behalf of the Seller,
is a party constitutes the legal, valid and binding obligation of GP, Inc.,
enforceable against GP, Inc. in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally.
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(e) Accuracy of Information. All information heretofore
furnished by GP, Inc. to the Agent, any Managing Agent or the Purchasers for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all such information hereafter furnished by GP, Inc. to the
Agent, any Managing Agent or the Purchasers will be, true and accurate in every
material respect, on the date such information is stated or certified and does
not and will not contain any material misstatement of fact or omit to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
(f) Places of Business. The principal place of business and
chief executive office of GP, Inc. are, and have been at all times since January
1, 1995, located at the address listed on Exhibit II. The jurisdiction of
organization, Federal Employer Identification Number and organizational
identification number of GP, Inc. are correctly set forth on Exhibit II.
(g) Names. GP, Inc. has not at any time used any corporate
name, trade name or assumed name other than "BTRGP, Inc."
(h) Actions, Suits. There are no actions, suits or proceedings
pending, or to the knowledge of GP, Inc., threatened, against or affecting GP,
Inc. or any of its properties, in or before any court, arbitrator or other body,
which are reasonably likely to materially adversely affect the financial
condition of GP, Inc. or the ability of GP, Inc. or the Seller to perform its
obligations under the Transaction Documents; GP, Inc. is not in default with
respect to any order of any court, arbitrator or governmental body.
(i) Not an Investment Company. GP, Inc. is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
from time to time, or any successor statute.
ARTICLE IV
CONDITIONS OF PURCHASES
Section 4.1. Conditions Precedent to Effectiveness of this
Agreement and Initial Purchase. The effectiveness of this Agreement and the
initial purchase of a Receivable Interest under this Agreement is subject to the
following conditions precedent:
(a) the Agent shall have received (i) counterparts of this
Agreement duly executed by each of the parties hereto and (ii) all other
documents (executed as applicable) that are listed on the "Closing List",
attached hereto as Schedule A;
(b) (i) a field audit on the Receivables conducted by outside
third-party auditors and pursuant to agreed upon procedures developed by the
Agent and agreed to by the Collection Agent, and (ii) an onsite due-diligence by
the Agent and the Purchasers at the Collection Agent's and/or Originator's
respective principal place of business and/or chief executive office, with each
(i) and (ii) producing satisfactory results to allow for the internal credit
approval by each of the Investors;
14
(c) marking by the Originator and Seller of their respective
records evidencing the sale of the Receivables contemplated thereof by the
Transfer Agreement and this Agreement;
(d) payment of any up-front fees due to the Purchasers
pursuant to their respective Fee Letters and due as of the date hereof; and
(e) evidence of compliance with clauses (iii), (iv) and (ix)
of Section 5.1(k) satisfactory to the Agent.
Section 4.2. Conditions Precedent to All Purchases and
Reinvestments. Each purchase of a Receivable Interest hereunder and each
Reinvestment shall be subject to the further conditions precedent that (a) in
the case of each such purchase, the Collection Agent shall have delivered to the
Agent and each applicable Managing Agent on or prior to the date of such
purchase, in form and substance satisfactory to the Agent and such Managing
Agent, all Monthly Reports and Weekly Reports as and when due under Section 6.5;
(b) on the date of each such purchase or Reinvestment, the following statements
shall be true both before and after giving effect to such purchase or
Reinvestment (and acceptance of the proceeds of such purchase or Reinvestment
shall be deemed a representation and warranty by the Seller that such statements
are then true):
(i) the representations and warranties set forth in Article
III are correct in all material respects on and as of the date of such
purchase or Reinvestment as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from such purchase or Reinvestment, that will constitute a Termination
Event, and no event has occurred and is continuing, or would result
from such purchase or Reinvestment, that would constitute a Potential
Termination Event;
(iii) neither the Liquidity Termination Date (with respect to
all Investors) nor the Facility Termination Date shall have occurred;
and
(iv) the aggregate Capital of all Receivable Interests does
not exceed the Purchase Limit and the aggregate Receivable Interests
does not exceed 100%;
and (c) each Managing Agent shall have received such other approvals, opinions
or documents as it shall have reasonably requested prior to the date of such
purchase and which relate to assurances sought by such Managing Agent or any
Purchaser in light of the occurrence of any Regulatory Change or the occurrence
of any other event or condition the effect of which is to increase the risk in
any material respect that any of the foregoing conditions shall not have been
satisfied at the time of such purchase.
15
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of Seller. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full, the Seller
hereby covenants that:
(a) Financial Reporting. The Seller will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with generally accepted accounting principles, and
furnish to the Agent and each Managing Agent:
(i) Annual Reporting. Within 90 days after the close
of each of its fiscal years, financial statements for such
fiscal year certified by its chief financial officer.
(ii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit IV signed by
the Seller's comptroller or chief financial officer (or the
officer of GP, Inc. performing such services for the Seller)
and dated the date of such annual financial statement.
(iii) Statements and Reports. Promptly upon the
furnishing thereof to the partners of the Seller, copies of
all financial statements, reports and similar statements so
furnished.
(iv) S.E.C. Filings. Promptly upon the filing
thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which The Bon-Ton
Stores, Inc., or any of its Subsidiaries files with the
Securities and Exchange Commission.
(v) Change in Credit and Collection Policy. At least
30 days prior to the effectiveness of any material change in
or amendment to the Credit and Collection Policy, a copy of
the Credit and Collection Policy then in effect and a notice
indicating such change or amendment.
(vi) Other Information. Such other information
(including non-financial information) as the Agent, any
Managing Agent or any Purchaser may from time to time
reasonably request.
(b) Notices. The Seller will notify the Agent and each
Managing Agent in writing of any of the following immediately upon learning of
the occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
(i) Termination Events or Potential Termination
Events. The occurrence of each Termination Event or each
Potential Termination Event, by a statement of the comptroller
or senior financial officer of the Seller (or the officer of
GP, Inc. performing such services for the Seller).
16
(ii) Judgment. The entry of any judgment or decree
against the Seller or any of its Subsidiaries if the aggregate
amount of all judgments and decrees then outstanding against
the Seller and its Subsidiaries (which judgments and decrees
are not covered by insurance, the carrier of which shall have
acknowledged such coverage) exceeds $5,000,000.
(iii) Litigation. The institution of any litigation,
arbitration proceeding or governmental proceeding which could
be reasonably likely to have a material adverse effect on the
Seller or any Subsidiary or the collectibility of the
Receivables.
(c) Compliance with Laws. The Seller will comply in all
material respects with all applicable laws, rules, regulations, orders writs,
judgments, injunctions, decrees or awards to which it may be subject.
(d) Audits. The Seller will furnish to the Agent and to each
Managing Agent from time to time such information with respect to it and the
Receivables as the Agent or such Managing Agent may reasonably request. The
Seller shall, from time to time during regular business hours as requested by
the Agent or any Managing Agent upon reasonable notice, permit the Agent or any
Managing Agent, or their respective agents or representatives, (i) to examine
and make copies of and abstracts from all Records in the possession or under the
control of the Seller relating to Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of the Seller for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to the Seller's
financial condition or the Receivables and the Related Security or the Seller's
performance hereunder or the Seller's performance under the Contracts with any
of the officers or employees of the Seller having knowledge of such matters.
Prior to the occurrence of a Termination Event, the Agent and the Managing
Agents shall be limited, in the aggregate, to two material audits in any 12
month period.
(e) Keeping and Marking of Records and Books.
(i) The Seller will maintain and implement
administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records
and other information reasonably necessary or advisable for
the collection of all Receivables (including, without
limitation, records adequate to permit the immediate
identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). The Seller will
give the Agent and each Managing Agent notice of any material
change in the administrative and operating procedures referred
to in the previous sentence.
(ii) The Seller will (a) at all times, xxxx its
master data processing records and other books and records
relating to the Receivable Interests with a legend, acceptable
to the Agent, describing the Receivable Interests and (b) upon
the request of the Agent or any Managing Agent (x) xxxx each
Contract with a
17
legend describing the Receivable Interests and (y) deliver to
the Agent all Contracts (including, without limitation, all
multiple originals of any such Contract) relating to the
Receivables.
(f) Credit and Collection Policy. The Seller will timely and
fully (i) perform and comply in all material respects with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract. The Seller will pay when due, and will cause (i) each of its partners
to pay when due all taxes arising in connection with income of the Seller and
the existence and maintenance of the continued good standing of the Seller and
(ii) the Originator to pay when due any taxes (including, without limitation any
sales taxes) payable in connection with the creation or transfer of Receivables
in the manner contemplated herein.
(g) Purchase by the Seller of Receivables from the Originator.
With respect to each Receivable purchased by the Seller from the Originator, the
Seller shall take all actions necessary to vest legal and equitable title to
such Receivable and the Related Security irrevocably in the Seller, including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC of all appropriate
jurisdictions (or any comparable law) to perfect the Seller's interest in such
Receivable and such other action to perfect, protect or more fully evidence the
interest of the Seller as the Agent or any Managing Agent may reasonably
request.
(h) Ownership Interest. The Seller shall take all necessary
action to establish and maintain a valid and perfected first priority undivided
percentage ownership interest in the Receivables and the Related Security and
Collections with respect thereto, to the full extent contemplated herein, in
favor of the Agent and the Purchasers, including, without limitation, taking
such action to perfect, protect or more fully evidence the interest of the Agent
or any Managing Agent and the Purchasers hereunder as the Agent may reasonably
request.
(i) Payment to the Originator. With respect to any Receivable
purchased by the Seller from the Originator, such sale shall be effected under,
and in strict compliance with the terms of, the Transfer Agreement, including,
without limitation, the terms relating to the amount and timing of payments to
be made to the Originator in respect of the purchase price for such Receivable.
(j) Performance and Enforcement of Transfer Agreement. The
Seller shall timely perform the obligations required to be performed by the
Seller, and vigorously enforce the rights and remedies accorded to the Seller,
under the Transfer Agreement.
(k) Purchasers' Reliance. The Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon the Seller's identity as a separate legal entity from the
Originator and GP, Inc. Therefore, from and after the date of execution and
delivery of this Agreement, the Seller shall take all reasonable steps
including, without limitation, all steps that the Agent or any Managing Agent or
any Purchaser may from time to time reasonably request to maintain the Seller's
identity as a separate legal entity and to make it manifest to third parties
that the Seller is an entity with assets and liabilities
18
distinct from those of the Originator and GP, Inc. and any Affiliates thereof
and not a division of the Originator or GP, Inc. Without limiting the generality
of the foregoing and in addition to the other covenants set forth herein, the
Seller shall:
(i) conduct its own business in its own name and
require that all full-time employees of the Seller identify
themselves as such and not as employees of the Originator or
GP, Inc. (including, without limitation, by means of providing
appropriate employees with business or identification cards
identifying such employees as the Seller's employees);
(ii) compensate all employees, consultants and agents
directly, from the Seller's bank accounts, for services
provided to the Seller by such employees, consultants and
agents and, to the extent any employee, consultant or agent of
the Seller is also an employee, consultant or agent of the
Originator or GP, Inc., allocate the compensation of such
employee, consultant or agent between the Seller and the
Originator (or GP, Inc. as applicable) on a basis which
reflects the services rendered to the Seller and the
Originator (or GP, Inc. as applicable);
(iii) clearly identify its offices (by signage or
otherwise) as its offices;
(iv) have a separate telephone number, which will be
answered only in its name and separate stationery, invoices
and checks in its own name;
(v) conduct all transactions with the Originator and
GP, Inc. strictly on an arm's-length basis, allocate all
overhead expenses (including, without limitation, telephone
and other utility charges) for items shared between the Seller
and the Originator or GP, Inc. on the basis of actual use to
the extent practicable and, to the extent such allocation is
not practicable, on a basis reasonably related to actual use;
(vi) observe all partnership formalities as a
distinct entity, and ensure that all partnership actions are
duly authorized by GP, Inc. as its sole general partner;
(vii) maintain the Seller's books and records
separate from those of the Originator and GP, Inc. and
otherwise readily identifiable as its own assets rather than
assets of the Originator or GP, Inc.;
(viii) be capable of preparing its financial
statements separately from those of the Originator and GP,
Inc. and insure that any consolidated financial statements of
the Originator that include the Seller have detailed notes
clearly stating that the Seller is a separate legal entity and
that its assets will be available first and foremost to
satisfy the claims of its own creditors;
(ix) except as herein specifically otherwise
provided, not commingle funds or other assets of the Seller
with those of the Originator or GP, Inc. and not maintain bank
accounts or other depository accounts to which the Originator
or
19
GP, Inc. is an account party, into which the Originator or GP,
Inc. makes deposits or from which the Originator or GP, Inc.
has the power to make withdrawals;
(x) not permit the Originator or GP, Inc. to pay any
of the Seller's operating expenses (except pursuant to
allocation arrangements that comply with the requirements of
subparagraphs (ii) and (v) above); and
(xi) not permit the Seller to be named as an insured
on the insurance policy covering the property of the
Originator or GP, Inc. or enter into an agreement with the
holder of such policy whereby in the event of a loss in
connection with such property, proceeds are paid to the
Seller.
(l) Collections by the Originator. The Seller shall cause the
Originator to remit all Collections received by the Originator to a Collection
Account not later than the Business Day immediately after receipt of such
Collections by the Originator and, at all times prior to such remittance, cause
such Collections shall be held in trust by the Originator, for the exclusive
benefit of the Purchasers, the Agent and the Managing Agents.
(m) Ownership of the Seller. The Originator and its affiliates
will at all times own 100% of the partnership interests of the Seller.
Section 5.2. Negative Covenants of Seller. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full, the Seller
hereby covenants that:
(a) Name Change, Offices, Records and Books of Accounts. The
Seller will not change its name, form of organization or jurisdiction of
organization (within the meaning of Section 9-102 of any applicable enactment of
the UCC) unless it shall have: (i) given the Agent at least 45 days prior notice
thereof and (ii) delivered to the Agent all financing statements, instruments
and other documents requested by the Agent or any Managing Agent in connection
with such change or relocation.
(b) Change in Payment Instructions to Obligors. The Seller
will not add or terminate any bank as a Collection Bank, or make any change in
its instructions to Obligors regarding payments to be made on the Receivables,
unless in the case of the proposed addition or termination of any bank as a
Collection Bank the Agent shall have received, at least 10 days before the
proposed effective date therefor, (i) written notice of such addition or
termination and (ii) with respect to the addition of a Collection Bank or a
Collection Account, a fully executed Collection Account Agreement; provided,
however, that the Seller may make changes in instructions to Obligors regarding
payments if such new instructions require such Obligor to make payments to an
existing Lock-Box Account.
(c) Sales, Liens, Etc. Except as otherwise provided herein,
the Seller shall not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, or create or suffer
to exist any Adverse Claim upon (including, without limitation, the filing of
any financing statement) or with respect to, any Receivable or Related Security
or Collections in respect thereof, or upon or with respect to any Contract under
which any Receivable arises, or any Collection Account or assign any right to
receive income in respect
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thereof, or any Swap Cash Collateral Account, and the Seller shall defend the
right, title and interest of the Agent and the Purchasers in, to and under any
of the foregoing property, against all claims of third parties claiming through
or under the Seller or the Originator.
(d) Change in Business or Credit and Collection Policy. The
Seller shall not make any material change in the character of its business or in
the Credit and Collection Policy, which change would, in either case, be
reasonably likely to impair the collectibility of any of the Receivables or
decrease the credit quality of any new Receivables. The Seller shall not engage
in any business or activity of any kind or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other undertaking
other than the transactions contemplated and authorized by this Agreement and
the Transfer Agreement (it being understood that the foregoing shall not
prohibit the Seller from making charitable contributions with the consent of the
Agent).
(e) Extension or Amendment of Receivables. Except as otherwise
permitted pursuant to Section 6.2(c), the Seller, acting as Collection Agent or
otherwise, shall not extend, amend or otherwise modify the terms of any
Receivable, or amend, modify or waive any term or condition of any Contract
under which such Receivable arises.
(f) Amendments to Transfer Agreement. The Seller shall not,
without the consent of each of the Managing Agents, (i) cancel or terminate the
Transfer Agreement, (ii) give any consent, waiver, directive or approval under
the Transfer Agreement, (iii) waive any default or breach under the Transfer
Agreement, or otherwise grant any indulgence thereunder, or (iv) amend,
supplement or otherwise modify any of the terms of the Transfer Agreement.
(g) Other Agreements. The Seller shall not enter into or be a
party to any agreement or instrument other than this Agreement, the Transfer
Agreement, the "Revolving Note" (as defined in the Transfer Agreement), and the
Interest Rate Swap Agreements and other than to incur ordinary operating
expenses in the conduct of, or in order to qualify to do business for purposes
of, its limited business affairs as expressly contemplated in Section 5.1(k).
(h) Amendments to Organizational Documents. The Seller shall
not amend partnership agreement or certificate of limited partnership in any
respect that would impair its ability to comply with the terms or provisions of
any of the Transaction Documents, including, without limitation, Section 5.1(k)
of this Agreement.
(i) Indebtedness. The Seller shall not create, incur,
guarantee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (i) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (ii) the incurrence of obligations under this
Agreement or the Transfer Agreement between the Seller and the Originator to
make payment for the purchase of Receivables under such Transfer Agreement,
(iii) the incurrence of operating expenses in the ordinary course of business of
the type otherwise contemplated in this Agreement, and (iv) the Interest Rate
Swap Agreements.
(j) Merger. The Seller shall not merge or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions,
21
and except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person.
Section 5.3. Affirmative Covenants of GP, Inc. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full, GP, Inc.
hereby covenants that:
(a) Financial Reporting. It will furnish to the Agent:
(i) Annual Reporting. Within 90 days after the close
of each of its fiscal years, financial statements for such
fiscal year certified by its chief financial officer.
(ii) Other Information. Such other information
(including non-financial information) as the Agent, any
Managing Agent or any Purchaser may from time to time
reasonably request.
(b) Compliance by the Seller. It will cause the Seller to
comply with each term, covenant and agreement on the Seller's part to be
performed hereunder (including, without limitation, Section 5.1(k) hereof) and
under each other Transaction Document, and the payment and performance of all
obligations and liabilities of the Seller hereunder and under each other
Transaction Document.
(c) Compliance with Laws. It will comply in all material
respects with all applicable laws, rules, regulations, orders writs, judgments,
injunctions, decrees or awards to which it may be subject, and will pay all
taxes when the same shall become due.
(d) Audits. It will furnish to the Agent and to each Managing
Agent from time to time such information with respect to it and the Receivables
as the Agent or any Managing Agent may reasonably request. GP, Inc. shall, from
time to time during regular business hours as requested by the Agent or any
Managing Agent upon reasonable notice, permit the Agent or any Managing Agent,
or their respective agents or representatives, (i) to examine and make copies of
and abstracts from all Records in the possession or under the control of GP,
Inc. relating to Receivables and the Related Security, including, without
limitation, the related Contracts, and (ii) to visit the offices and properties
of GP, Inc. for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to the financial condition of GP, Inc. or
the Receivables and the Related Security or the Seller's or GP, Inc.'s
performance hereunder or the Seller's performance under the Contracts with any
of the officers or employees of GP, Inc. having knowledge of such matters.
(e) Separate Identity. GP, Inc. acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon (x) the Seller's identity as a separate legal entity from the
Originator and from GP, Inc. and (y) GP, Inc.'s identity as a separate legal
entity from the Originator. Therefore, from and after the date of execution and
delivery of this Agreement, GP, Inc. shall take all reasonable steps including,
without limitation, all steps that the Agent or any Managing Agent or any
Purchaser may from time to time reasonably request to maintain its identity as a
separate legal entity and to make it manifest to third parties that it is an
entity with assets and liabilities distinct from those of the Seller and the
22
Originator and any Affiliates thereof and that it is not a division of the
Originator. Without limiting the generality of the foregoing and in addition to
the other covenants set forth herein, GP, Inc. shall:
(i) conduct its own business in its own name and
require that all full-time employees of GP, Inc. identify
themselves as such and not as employees of the Originator
(including, without limitation, by means of providing
appropriate employees with business or identification cards
identifying such employees as GP, Inc.'s employees and by
providing stationery in the name of GP, Inc. for business
correspondence);
(ii) compensate all employees, consultants and agents
directly, from GP, Inc.'s bank accounts, for services provided
to GP, Inc. by such employees, consultants and agents and, to
the extent any employee, consultant or agent of GP, Inc. is
also an employee, consultant or agent of the Originator,
allocate the compensation of such employee, consultant or
agent between GP, Inc. and the Originator on a basis which
reflects the services rendered to GP, Inc. and the Originator;
(iii) conduct all transactions with the Originator
strictly on an arm's-length basis, allocate all overhead
expenses (including, without limitation, telephone and other
utility charges) for items shared between GP, Inc. and the
Originator on the basis of actual use to the extent
practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
(iv) at all times have at least one member of its
Board of Directors who is not (A) a director, officer or
employee of the Originator or the Seller or any affiliate
thereof (other than GP, Inc.), (B) a person related to any
officer or director of the Originator or the Seller, (C) a
holder (directly or indirectly) of more than 5% of any voting
securities of the Originator or the Seller, or (D) a person
related to a holder (directly or indirectly) of more than 5%
of any voting securities of the Originator or the Seller;
(v) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions are duly
authorized by unanimous vote of its Board of Directors;
(vi) maintain its books and records separate from
those of the Originator and the Seller and otherwise readily
identifiable as its own assets rather than assets of the
Originator or the Seller;
(vii) prepare its financial statements separately
from those of the Originator and the Seller and insure that
any consolidated financial statements of the Originator that
include GP, Inc. have detailed notes clearly stating that GP,
Inc. is a separate corporate entity and that its assets will
be available first and foremost to satisfy the claims of its
creditors;
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(viii) not commingle funds or other assets of GP,
Inc. with those of the Originator or the Seller and not
maintain bank accounts or other depository accounts to which
the Originator or the Seller is an account party, into which
the Originator or the Seller makes deposits or from which the
Originator or the Seller has the power to make withdrawals;
(ix) not permit the Originator or the Seller to pay
any of GP, Inc.'s operating expenses (except pursuant to
allocation arrangements that comply with the requirements of
subparagraphs (ii) and (iii) above); and
(x) not permit itself to be named as an insured on
the insurance policy covering the property of the Originator
or the Seller or enter into an agreement with the holder of
such policy whereby in the event of a loss in connection with
such property, proceeds are paid to GP, Inc..
Section 5.4. Negative Covenants of GP, Inc. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full, GP, Inc. hereby
covenants that:
(a) Name Change, Offices, Records and Books of Accounts. It
will not change its name, form of organization or jurisdiction of organization
(within the meaning of Section 9-102 of any applicable enactment of the UCC)
unless it shall have given the Agent at least 45 days prior notice thereof.
(b) Sales, Liens, Etc. It shall not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any of
its assets, properties or interests in property or assign any right to receive
income in respect thereof.
(c) Change in Business or Credit and Collection Policy. It
shall not make any material change in the character of its business. It shall
not engage in any business or activity of any kind or enter into any transaction
other than the transactions contemplated and authorized by this Agreement and
the Transfer Agreement. It shall not enter into or be a party to any agreement
or instrument other than this Agreement, the Transfer Agreement and the
"Revolving Note" (as defined in the Transfer Agreement) and other than to incur
ordinary operating expenses in the conduct of, or in order to qualify to do
business for purposes of, its limited business affairs as expressly contemplated
in Section 5.3(e).
(d) Amendments to Corporate Documents. GP, Inc. shall not
amend its certificate of incorporation or by-laws in any respect that would
impair its ability to comply with the terms or provisions of any of the
Transaction Documents, including, without limitation, Section 5.3(e) of this
Agreement.
(e) Indebtedness. GP, Inc. shall not create, incur, guarantee,
assume or suffer to exist any indebtedness or other liabilities, whether direct
or contingent, other than (i) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in
24
the ordinary course of business, and (ii) the incurrence of operating expenses
in the ordinary course of business of the type otherwise contemplated in this
Agreement.
(f) Merger; Ownership of the Seller. GP, Inc. shall not merge
or consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions, and except as
otherwise contemplated herein) all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person. GP, Inc. shall not permit any Person other than itself to
become or be a general partner in the Seller, and shall not permit any Person
other than the Originator to become or be a limited partner in the Seller.
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.1. Designation of Collection Agent. (a) The
servicing, administration and collection of the Receivables shall be conducted
by such Person (the "Collection Agent") so designated from time to time in
accordance with this Section 6.1. The Seller is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Collection Agent pursuant
to the terms of this Agreement. The Agent may at any time, and at the direction
of any Managing Agent, shall, designate as Collection Agent a Person to succeed
the Seller or any successor Collection Agent.
(b) The Seller is permitted to delegate, and the Seller hereby
advises the Purchasers, the Agent and the Managing Agents that it has delegated,
to the Originator, as "Subservicer" of the Collection Agent, all of its duties
and responsibilities as Collection Agent hereunder. The Originator has delegated
certain of its duties and responsibilities as more particularly described on
Schedule B hereto. Notwithstanding the foregoing, (i) the Seller shall be and
remain primarily liable to the Agent, the Managing Agents and the Purchasers for
the full and prompt performance of all duties and responsibilities of the
Collection Agent hereunder and (ii) the Agent, the Managing Agents and the
Purchasers shall be entitled to deal exclusively with the Seller in matters
relating to the discharge by the Collection Agent of its duties and
responsibilities hereunder, and the Agent, the Managing Agent and the Purchasers
shall not be required to give notice, demand or other communication to any
Person other than the Seller in order for communication to the Collection Agent
and its respective delegatees and Subservicers in respect thereof to be
accomplished. The Seller, at all times that it is the Collection Agent, shall be
responsible for providing its delegatees and Subservicers with any notice given
under this Agreement. Without the prior written consent of each Managing Agent
and the Required Investors, the Seller shall not be permitted to delegate any of
its duties or responsibilities as Collection Agent to any Person other than the
Originator, and the Originator shall not be permitted to further delegate to any
other Person any of the duties or responsibilities of the Collection Agent
delegated to it by the Seller.
Section 6.2. Duties of Collection Agent. (a) The Collection
Agent shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Receivable
25
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) The Collection Agent shall administer the Collections in
accordance with the procedures described herein and in Article I. The Collection
Agent shall set aside and hold in trust for the account of the Seller, the
Agent, the Managing Agents and the Purchasers their respective shares of the
Collections of Receivables in accordance with Section 1.7. The Collection Agent
shall upon the request of the Agent, with the consent, or at the direction of
the Managing Agents, after the occurrence of a Liquidation Day, segregate, in a
manner acceptable to the Agent and the Managing Agents, all cash, checks and
other instruments received by it from time to time constituting Collections from
the general funds of the Collection Agent or the Seller prior to the remittance
thereof in accordance with Section 1.7. If the Collection Agent shall be
required to segregate Collections pursuant to the preceding sentence, the
Collection Agent shall segregate and deposit with a bank designated by the Agent
such allocable share of Collections of Receivables set aside for the Purchasers
on the first Business Day following receipt by the Collection Agent of such
Collections, duly endorsed or with duly executed instruments of transfer.
(c) The Collection Agent, may, in accordance with the Credit
and Collection Policy, extend the maturity of any Receivable, adjust the
Outstanding Balance of any Receivable as a result of Dilutions, or adjust the
Outstanding Balance of any Defaulted Receivable as the Collection Agent may
determine to be appropriate to maximize Collections thereof; provided, however,
that such extension or adjustment shall not alter the status of such Receivable
as a Delinquent Receivable or Defaulted Receivable or limit the rights of the
Agent, the Managing Agents or the Purchasers under this Agreement.
Notwithstanding anything to the contrary contained herein, the Agent, with the
consent or at the direction of the Managing Agents, shall have the absolute and
unlimited right to direct the Collection Agent to commence or settle any legal
action with respect to any Receivable or to foreclose upon or repossess any
Related Security.
(d) The Collection Agent shall hold in trust for the Seller
and the Purchasers, in accordance with their respective Receivable Interests,
all Records that evidence or relate to the Receivables, the related Contracts
and Related Security or that are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of the Agent, with
consent or at the direction of the Managing Agents, deliver or make available to
the Agent all such Records, at a place selected by the Agent. The Collection
Agent shall, as soon as practicable following receipt thereof, turn over to the
Seller (i) that portion of Collections of Receivables representing the Seller's
undivided fractional ownership interest therein, less, in the event the Seller
is not the Collection Agent, all reasonable out-of-pocket costs and expenses of
the Collection Agent of servicing, administering and collecting the Receivables,
and (ii) any cash collections or other cash proceeds received with respect to
Indebtedness not constituting Receivables. The Collection Agent shall, from time
to time at the request of any Purchaser, furnish to the Purchasers (promptly
after any such request) a calculation of the amounts set aside for the
Purchasers pursuant to Section 1.7.
26
(e) Any payment by an Obligor in respect of any indebtedness
owed by it to the Seller or the Originator shall, except as otherwise specified
by such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, with the consent or at the direction of the Managing
Agents, be applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 6.3. Collection Notices. (a) The Agent is authorized
at any time to date and to deliver to the Collection Banks, the notice attached
to the Collection Account Agreements (the "Collection Notice"). The Seller
hereby transfers to the Agent for the benefit of the Purchasers the exclusive
ownership and control of the Collection Accounts and the Agent shall permit the
Collection Agent, pursuant to the terms of the Collection Account Agreements, to
withdraw funds from the Collection Accounts unless the Agent has notified the
applicable Collection Bank to the contrary. The Seller hereby authorizes the
Agent, and agrees that the Agent shall be entitled to (i) endorse the Seller's
name on checks and other instruments representing Collections, (ii) enforce the
Receivables, the related Contracts and the Related Security and (iii) take such
action as shall be necessary or desirable to cause all cash, checks and other
instruments constituting Collections of Receivables to come into the possession
of the Agent rather than the Seller.
(b) The Agent may at any time, and at the direction of any
Managing Agent, shall, on written notice to the Seller, direct that the Seller,
and the Seller thereupon shall, direct the Originator to (i) cease accepting
In-Store Collections at individual cash registers within a store, (ii) accept
all In-Store Collections at a single collection point within each store, and
otherwise segregate, record and maintain the separateness of all In-Store
Collections from all other cash and payment items handled or located at such
store, and (iii) remit on a daily basis from each store location all In-Store
Collections (in the form received) to such location or locations as the Agent
may in its sole discretion direct, including, without limitation, to a deposit
account at any bank selected by the Agent (which may be a separate deposit
account at the bank where any store, in the ordinary course, deposits its
Collections) or to a concentration location (which may entail daily delivery by
overnight courier by each store to such location of such store's In-Store
Collections). The Seller shall take all actions necessary, or that the Agent may
reasonably request, to implement any alternative handling procedures required
under this Section 6.3(b) for In-Store Collections.
Section 6.4. Responsibilities of the Seller. Anything herein
to the contrary notwithstanding, the exercise by the Agent and the Purchasers of
their rights hereunder shall not release the Collection Agent or the Seller from
any of their duties or obligations with respect to any Receivables or under the
related Contracts. None of the Agent, any Managing Agent or any of the
Purchasers shall have any obligation or liability with respect to any
Receivables or related Contracts, nor shall any of them be obligated to perform
the obligations of the Seller.
Section 6.5. Reports. On the 15th day of each month (or, if
such day is not a Business Day, the next Business Day) and at such times as the
Agent or any Managing Agent shall request, the Collection Agent shall prepare
and forward a Monthly Report to the Agent and
27
each Managing Agent. On February 6, 2003 and on Thursday of each successive
week, the Collection Agent shall prepare and forward a Weekly Report to the
Agent and each Managing Agent. Together with the Monthly Reports required
hereunder, the Collection Agent shall deliver a compliance certificate in
substantially the form of Exhibit IV signed on behalf of the Collection Agent by
the Collection Agent's corporate treasurer or chief financial officer and dated
the date of such Monthly Report. At such times as the Agent or any Managing
Agent shall request, the Collection Agent shall prepare and forward to the Agent
and each Managing Agent a listing by Obligor of all Receivables together with an
aging of such Receivables.
Section 6.6. Subservicer Fee. In consideration of the
Subservicer's agreement to perform the duties and obligations of the Collection
Agent, as such duties and obligations have been delegated pursuant to Section
6.1(b), the Seller hereby agrees to pay to the Subservicer on the first Business
Day of each month, a fee (the "Subservicer Fee") in an amount equal to (i) 2.0%
per annum multiplied by (ii) the average daily Outstanding Balance of all
Receivables during the preceding calendar month.
ARTICLE VII
TERMINATION EVENTS
Section 7.1. Termination Events. The occurrence of any one or
more of the following events shall constitute a Termination Event:
(a) (i) the Collection Agent (if then any Person designated by
the Seller is the Collection Agent), the Seller, GP, Inc. or the Originator
shall fail to perform or observe any term, covenant or agreement hereunder
(other than as referred to in clause (ii) of this Section 7.1(a)) or under the
Transfer Agreement, and such failure shall remain unremedied for ten (10)
Business Days after the earlier to occur of knowledge thereof on the part of the
Collection Agent or the Seller or notice thereof given by the Agent or any
Managing Agent to the Seller, or (iii) the Collection Agent (if then any Person
designated by the Seller is the Collection Agent), the Originator, the Seller or
GP, Inc. shall fail to make any payment or deposit to be made by it hereunder or
under the Fee Letter when due and such failure shall remain unremedied for one
(1) Business Day.
(b) Any representation, warranty, certification or statement
made by the Seller or GP, Inc. in this Agreement or in any other document
delivered pursuant hereto or by the Originator under the Transfer Agreement
shall prove to have been incorrect in any material respect when made or deemed
made.
(c) (i) The Seller, GP, Inc., the Originator, The Bon-Ton
Stores, Inc. or any of their respective Subsidiaries shall generally not pay its
debts as such debts become due or shall admit in writing its inability to pay
its debts generally or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller, GP,
Inc., the Originator, The Bon-Ton Stores, Inc. or any of their respective
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, dissolution, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
28
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or (ii) any judicial or nonjudicial dissolution of the Seller shall occur, or an
event of withdrawal with respect to GP, Inc. as the general partner in the TBTR
Partnership shall occur or (iii) the Seller, GP, Inc., the Originator, The
Bon-Ton Stores, Inc. or any of their respective Subsidiaries shall take any
corporate or partnership action to authorize any of the actions set forth in
clause (i) or clause (ii) above in this subsection (c).
(d) (i) The Seller, TBTR Partnership, GP, Inc. or the
Originator shall fail to observe or perform any covenant, condition or provision
of the Transfer Agreement, and such failure shall have continued beyond any
applicable cure period thereunder, or (ii) the Seller or the Originator, as
applicable, shall have waived or relinquished its rights under the Transfer
Agreement with respect to any such failure or (iii) the "Termination Date" in
the Transfer Agreement shall have occurred, or (iii) the Originator for any
reason shall cease to sell, or the Seller for any reason shall cease to buy,
"Receivables" under the Transfer Agreement.
(e) The three month rolling average Excess Spread shall be
less than 2%.
(f) (i) The Originator shall cease to own directly 100% of
shares of the outstanding capital stock of GP, Inc. entitled to vote generally
for the election of directors of such corporation, (ii) GP, Inc. shall cease to
own directly all of the general partnership interests in the Seller, (iii) the
Originator shall cease to own directly all of the limited partnership interests
in the Seller or (iv) a Change of Control shall occur.
(g) As at the end of any fiscal month, (i) the average
Delinquency Ratio in respect of the three fiscal months then most recently ended
shall exceed 3.5% or (ii) the average Loss-to-Liquidation Ratio in respect of
the three fiscal months then most recently ended shall exceed 3.5%.
(h) The aggregate Receivable Interests for all the Purchasers
shall exceed 100% at any time and shall not have been cured within the Required
Cure Period.
(i) The Parent and its Subsidiaries shall fail to maintain, on
a consolidated basis at the end of each Fiscal Quarter of Parent a Fixed Charge
Coverage Ratio for the 12-month period then ended of not less than 1.0 to 1.0.
(j) The failure of any Material Entity (as defined in Section
7.2) to make any payment when due (whether at scheduled maturity, by
acceleration, when declared to be due and payable or otherwise) in respect of
any Indebtedness (other than any Indebtedness with respect to which the payee is
The Bon-Ton Stores, Inc. or any Affiliate thereof) outstanding (individually or
in the aggregate) in a principal amount of $5,000,000 and such failure shall
remain unremedied for three (3) Business Days.
Section 7.2. Payment Default on Other Indebtedness. In the
event that any Material Entity (as defined below) shall fail to make any payment
when due (whether at scheduled maturity, by acceleration, when declared to be
due and payable or otherwise) in respect of any Indebtedness (other than any
Indebtedness with respect to which the payee is The
29
Bon-Ton Stores, Inc. or any Affiliate thereof) outstanding (individually or in
the aggregate) in a principal amount of $2,500,000 or more at any time that a
Person affiliated with or designated by the Seller is then the Collection Agent,
and such failure shall remain unremedied for three (3) Business Days, the Agent,
with the consent or at the direction of any Managing Agent, may demand that the
Seller thereupon seek and obtain the services of a new Collection Agent
satisfactory to the Agent and the Managing Agents. For this purpose, "Material
Entity" means the Originator, The Bon-Ton Stores, Inc., The Bon-Ton Corp., The
Bon-Ton National Corp., The Bon-Ton Trade Corp., The Bon-Ton Stores of
Lancaster, Inc., Xxxx, Xxxxxxx & Xxxxxxxx Co., Inc. and any other Person
controlling, controlled by or under common control with The Bon-Ton Stores, Inc.
and representing not less than 5% of the net worth of the consolidated group of
which The Bon-Ton Stores, Inc. comprises a part.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnities by the Seller. Without limiting any
other rights which the Agent, any Managing Agent or any Purchaser may have
hereunder or under applicable law, the Seller hereby agrees to indemnify the
Agent, each Managing Agent and each Purchaser and their respective officers,
directors, agents and employees (each an "Indemnified Party") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of the Agent, such Managing Agent or such Purchaser) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of this Agreement or the acquisition, either directly or
indirectly, by a Purchaser of an interest in the Receivables, excluding,
however:
(i) Indemnified Amounts to the extent final judgment of a
court of competent jurisdiction holds such Indemnified Amounts resulted
from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(ii) recourse for Receivables that are uncollectible or
uncollected (whether on account of the insolvency, bankruptcy or lack
of creditworthiness of the related Obligor or otherwise); provided that
the foregoing shall not negate, impair or otherwise modify any (or the
effect of any) of the representations, warranties, covenants or other
agreements of the Seller contained in this Agreement; or
(iii) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located, on or
measured by the overall net income of such Indemnified Party to the
extent that the computation of such taxes is consistent with the
Intended Characterization;
provided, however, that nothing contained in this sentence shall limit the
liability of the Seller or the Collection Agent or limit the recourse of the
Purchasers to the Seller or Collection Agent for amounts otherwise specifically
provided to be paid by the Seller or the Collection Agent under the terms of
this Agreement. Without limiting the generality of the foregoing
indemnification,
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the Seller shall indemnify the Agent, the Managing Agents and the Purchasers for
Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to the Seller or the Collection Agent) relating to or
resulting from:
(i) any representation or warranty made by the Seller, GP, Inc.,
the Collection Agent (if then any Person designated by the
Seller is the Collection Agent) or any officers of the Seller
or the Collection Agent (if then any Person designated by the
Seller is the Collection Agent) under or in connection with
this Agreement, any Monthly Report, any Weekly Report or any
other information or report delivered by the Seller, GP, Inc.
or the Collection Agent (if then any Person designated by the
Seller is the Collection Agent) pursuant hereto, which shall
have been false or incorrect when made or deemed made;
(ii) the failure by the Seller or the Collection Agent to comply
with any applicable law, rule or regulation with respect to
any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein
with any such applicable law, rule or regulation;
(iii) any failure of the Seller, GP, Inc. or the Collection Agent to
perform its duties or obligations in accordance with the
provisions of this Agreement;
(iv) any products liability or similar claim arising out of or in
connection with merchandise, insurance or services which are
the subject of any Contract;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based
on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related
to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(vi) any Receivable which is treated as or represented by the
Seller to be an Eligible Receivable (including, without
limitation, for purposes of computing the Net Receivables
Balance at any time) which is not at the date thereof an
Eligible Receivable;
(vii) the commingling of Collections of Receivables at any time with
other funds;
(viii) any investigation, litigation or proceeding related to or
arising from this Agreement, the transactions contemplated
hereby, the use of the proceeds of a purchase, the ownership
of the Receivable Interests or any other investigation,
litigation or proceeding relating to the Seller in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby; excluding, however, any
investigation, litigation or proceeding that relates solely to
the compliance or noncompliance by any Purchaser with any
state or federal
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laws applicable to such Purchaser because of such Purchaser's
regulatory status or any contractual restriction (other than
the Transaction Documents) binding on such Purchaser;
(ix) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds
of sovereignty or otherwise from any legal action, suit or
proceeding; and
(x) any Termination Event described in Section 7.1(c).
The Seller shall be given notice of any claim for indemnified liabilities and,
in the case of any litigation or proceeding brought by any Person that is not a
party to this Agreement which litigation or proceeding is reasonably likely to
give rise to a claim hereunder for indemnification, the Seller shall be afforded
a reasonable opportunity to participate in the defense, compromise or settlement
thereof.
Section 8.2. Increased Cost and Reduced Return. (a) If any
Funding Source shall be charged any fee, expense or increased cost on account of
any Regulatory Change after the date hereof: (i) which subjects any Funding
Source to any tax of any kind whatsoever with respect to this Agreement, any
Funding Agreement or a Funding Source's obligations under a Funding Agreement,
or on or with respect to the Receivables, or changes the basis of taxation of
payments to any Funding Source of any amounts payable under any Funding
Agreement (excluding net income taxes and franchise or gross receipts taxes
(imposed in lieu of net income taxes) imposed on the Funding Source as a result
of a present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and such Funding Source or any political
subdivision or taxing authority thereof or therein) or (ii) which imposes,
modifies or deems applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of a Funding Source, or
credit extended by a Funding Source pursuant to a Funding Agreement or which
imposes a requirement that the interest of a Conduit hereunder be accounted for
on financial statements as an asset of any Funding Source, (iii) which imposes
any requirement regarding capital adequacy in respect of such Funding Source (or
any corporation controlling such Funding Source), and the effect thereof is to
reduce the rate of return on such Funding Source's or such corporation's capital
as a consequence of obligations existing hereunder to a level below which could
have been achieved but for such Regulatory Change (taking into consideration
such Funding Source's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Funding Source to be material, or (iv)
which imposes any other condition the result of which is to increase the cost to
a Funding Source of performing its obligations under a Funding Agreement, or to
reduce the rate of return on a Funding Source's capital as a consequence of its
obligations under a Funding Agreement, or to reduce the amount of any sum
received or receivable by a Funding Source under a Funding Agreement or to
require any payment calculated by reference to the amount of interests or loans
held or interest received by it, then, within five Business Days following
demand by the applicable Managing Agent, the Seller shall pay to such Managing
Agent, for the benefit of the relevant Funding Source, such amounts charged to
such Funding Source or to compensate such Funding Source for such reduction.
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(b) Each Funding Source shall be required to use reasonable
efforts in order to avoid or to minimize, as the case may be, the payment by the
Seller of any additional amount under Section 8.2(a)(iii); provided, however,
that no Funding Source shall be obligated to incur any expense, cost or other
amount in connection with utilizing such reasonable efforts.
Section 8.3. Other Costs and Expenses. The Seller shall pay to
the Agent, the Managing Agents and the Conduits on demand all reasonable costs
and out-of-pocket expenses in connection with the preparation, execution,
delivery and administration of this Agreement, the transactions contemplated
hereby and the other documents to be delivered hereunder, including without
limitation, the reasonable cost of any Conduit's auditors auditing the books,
records and procedures of the Seller, reasonable fees and out-of-pocket expenses
of legal counsel for the Agent, the Managing Agents and the Conduits (which such
counsel may be employees of the Agent, the Managing Agents or the Conduits) with
respect thereto and with respect to advising the Agent, the Managing Agents and
the Conduits as to their respective rights and remedies under this Agreement.
The Seller shall pay to the Agent or each Managing Agent on demand any and all
reasonable costs and expenses of the Agent, such Managing Agent and the
Purchasers, if any, including reasonable counsel fees and expenses in connection
with the enforcement of this Agreement and the other documents delivered
hereunder and in connection with any restructuring or workout of this Agreement
or such documents, or the administration of this Agreement following a
Termination Event. The Seller shall reimburse any Conduit on demand for all
other reasonable costs and expenses incurred by such Conduit or any shareholder
of such Conduit ("Other Costs"), including, without limitation, the cost of
auditing such Conduit's books by certified public accountants, the cost of
rating the Commercial Paper by independent financial rating agencies, and the
reasonable fees and out-of-pocket expenses of counsel for such Conduit or any
counsel for any shareholder of such Conduit with respect to advising such
Conduit or such shareholder as to matters relating to such Conduit's operations.
Notwithstanding the foregoing, the Seller shall not be liable to the Agent, any
Managing Agent or any Conduit in respect of the costs and out-of-pocket expenses
incurred in connection with any audit conducted under Section 5.1(d) of this
Agreement conducted prior to the occurrence of any Termination Event to the
extent that the aggregate amount of such costs and expenses during any 12 month
period shall exceed $35,000. Each Managing Agent and each Conduit hereby agrees
that the Agent may, in its sole discretion, limit the amount of costs and
expenses of any single audit conducted under Section 5.1(d) that may be
reimbursed under this Section 8.3 to an amount less than $35,000. After the
occurrence and during the continuance of a Termination Event, the foregoing
limitation on audit costs shall not apply. The Seller shall make each such
reimbursement for costs and expenses, and shall make each other payment required
under this Section 8.3, within five Business Days following demand by the Agent
therefor.
Section 8.4. Allocations. Each Conduit shall allocate the
liability for Other Costs among the Seller and other Persons with whom such
Conduit has entered into agreements to purchase interests in receivables ("Other
Sellers"). If any Other Costs are attributable to the Seller and not
attributable to any Other Seller, the Seller shall be solely liable for such
Other Costs. However, if Other Costs are attributable to Other Sellers and not
attributable to the Seller, such Other Sellers shall be solely liable for such
Other Costs. All allocations to be made pursuant to the foregoing provisions of
this Article VIII shall be made by the applicable Conduit in its sole discretion
and shall be binding on the Seller and the Collection Agent.
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ARTICLE IX
THE AGENT
Section 9.1. Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as Agent hereunder and under each other
Transaction Document, and authorizes the Agent and such Purchaser's Managing
Agent to take such actions as the Agent or Managing Agent, as the case may be,
on its behalf and to exercise such powers as are delegated to the Agent or such
Managing Agent, respectively, by the terms of this Agreement and the other
Transaction Documents together with such powers as are reasonably incidental
thereto. Neither the Agent nor any Managing Agent shall have any duties or
responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent or any Managing Agent shall be read into
this Agreement or any other Transaction Document or otherwise exist for the
Agent or such Managing Agent. As to any matters not expressly provided for by
this Agreement (including, without limitation, any enforcement or collection
activity), neither the Agent nor any Managing Agent shall be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Investors. In performing its
functions and duties hereunder and under the other Transaction Documents, (i)
the Agent shall act solely as agent for the Purchasers, (ii) each Managing Agent
shall act solely as agent for the Conduits and Investors in its related Purchase
Group and (iii) neither the Agent nor any Managing Agent shall assume or be
deemed to have assumed any obligation or relationship of trust or agency with or
for the Seller, or any of its successors or assigns, or any Swap Counterparty,
or any of its successors or assigns. Neither the Agent nor any Managing Agent
shall be required to take any action which exposes the Agent or such Managing
Agent to personal liability or which is contrary to this Agreement, any other
Transaction Document or applicable law. The appointment and authority of the
Agent hereunder shall terminate upon the indefeasible payment in full of all
Aggregate Unpaids and all Interest Rate Swap Obligations owing to Bank One, as
Swap Counterparty. The appointment and authority of any Managing Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids
owing to all members of such Managing Agent's Purchase Group. Each Purchaser
hereby authorizes the Agent to execute and/or file each of the Uniform
Commercial Code financing statements on behalf of such Purchaser (the terms of
which shall be binding on such Purchaser).
Section 9.2. Delegation of Duties. The Agent and the Managing
Agents may execute any of their respective duties under this Agreement and each
other Transaction Document by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. Neither the Agent nor any Managing Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.3. Exculpatory Provisions. None of the Agent, the
Managing Agents or any of their respective directors, officers, agents or
employees shall be (i) liable to the Purchasers for any action lawfully taken or
omitted to be taken by it or them under or in connection with this
34
Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by the Seller contained in this Agreement, any other Transaction
Document or any certificate, report, statement or other document referred to or
provided for in, or received under or in connection with, this Agreement, or any
other Transaction Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, or any other
Transaction Document or any other document furnished in connection herewith or
therewith, or for any failure of the Seller to perform its obligations hereunder
or thereunder, or for the satisfaction of any condition specified in Article IV,
or for the perfection, priority, condition, value or sufficiency or any
collateral pledged in connection herewith. Neither the Agent nor any Managing
Agent shall be under any obligation to any Purchaser to ascertain or to inquire
as to the observance or performance of any of the agreements or covenants
contained in, or conditions of, this Agreement or any other Transaction
Document, or to inspect the properties, books or records of the Seller. Neither
the Agent nor any Managing Agent shall be deemed to have knowledge of any
Termination Event or Potential Termination Event unless the Agent or such
Managing Agent, as applicable, has received notice from the Seller or a
Purchaser. No Managing Agent shall have any responsibility hereunder to any
purchaser other than the Purchasers in its Purchase Group.
Section 9.4. Reliance by Agents. The Agent and the Managing
Agents shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or conversation believed by them to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Seller), independent accountants and other experts selected by
the Agent or any Managing Agent. The Agent shall in all cases be fully justified
in failing or refusing to take any action under this Agreement or any other
Transaction Document unless it shall first receive such advice or concurrence of
the Managing Agents as the Agent deems appropriate and it shall first be
indemnified to its satisfaction by the Investors, provided that unless and until
the Agent shall have received such advice, the Agent may take or refrain from
taking any action, as the Agent shall deem advisable and in the best interests
of the Purchasers. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, in accordance with a request of the Managing Agents
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Purchasers.
Section 9.5. Non-Reliance on Agents and Other Purchasers. Each
Purchaser expressly acknowledges that none of the Agent, the Managing Agents or
any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent or any Managing Agent hereafter taken, including,
without limitation, any review of the affairs of the Seller, shall be deemed to
constitute any representation or warranty by the Agent or such Managing Agent.
Each Purchaser represents and warrants to the Agent and each Managing Agent that
it has and will, independently and without reliance upon the Agent, any Managing
Agent or any other Purchaser and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of the Seller and made its own decision to enter into this
Agreement, the other Transaction Documents and all other documents related
hereto or thereto.
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Section 9.6. Reimbursement and Indemnification. The Investors
agree to reimburse and indemnify the Agent, and the Investors in each Purchase
Group agree to reimburse the Managing Agent for such Purchase Group, and their
respective officers, directors, employees, representatives and agents ratably
according to their Commitment Pro Rata Shares, to the extent not paid or
reimbursed by the Seller (i) for any amounts for which the Agent, acting in its
capacity as Agent, or such Managing Agent acting in its capacity as a Managing
Agent is entitled to reimbursement by the Seller hereunder and (ii) for any
other expenses incurred by the Agent, in its capacity as Agent or such Managing
Agent acting in its capacity as a Managing Agent and acting on behalf of the
related Purchasers, in connection with the administration and enforcement of
this Agreement and the other Transaction Documents; provided, however, that the
Investors shall have no liability under this Section 9.6 to reimburse the Agent
or the Managing Agent for such Investor's Purchase Group in respect of any such
amount or expense that arises by reason of the gross negligence or willful
misconduct of the Agent or such Managing Agent, as the case may be.
Section 9.7. Agents in their Individual Capacities. Each of
the Agent, each Managing Agent and their respective Affiliates may make loans
to, accept deposits from and generally engage in any kind of business with the
Seller or any Affiliate of the Seller as though the it were not the Agent or a
Managing Agent hereunder. With respect to the acquisition of Receivable
Interests pursuant to this Agreement, each of the Agent and each Managing Agent
shall have the same rights and powers under this Agreement as any Purchaser and
may exercise the same as though it were not the Agent or a Managing Agent, as
applicable, and the terms "Investor," "Purchaser," "Investors" and "Purchasers"
shall include each of the Agent and each Managing Agent in its individual
capacity.
Section 9.8. Successor Agent. The Agent may, upon thirty days'
notice to the Seller and the Purchasers, and the Agent will, upon the written
direction of all of the Purchasers (other than the Agent, in its individual
capacity), resign as Agent. If the Agent shall resign, then the Managing Agents
during such thirty-day period shall appoint from among the Purchasers a
successor agent. If for any reason no successor Agent is appointed by the
Managing Agents during such thirty-day period, then effective upon the
termination of such thirty-day period, the Managing Agents shall perform all of
the duties of the Agent hereunder and under the other Transaction Documents and
the Seller shall make all payments in respect of the Aggregate Unpaids directly
to the applicable Managing Agents and for all purposes shall deal directly with
the Managing Agents. After the effectiveness of any retiring Agent's resignation
hereunder, the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Transaction Documents and the
provisions of this Article IX and Article VIII shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.
Section 9.9. Successor Managing Agents. Any Managing Agent
may, upon thirty days' notice to Seller, the Agent and the Purchasers in its
Purchase Group, and a Managing Agent will, upon the direction of all the
Purchasers in its Purchase Group (other than such Managing Agent in its
individual capacity), resign as Managing Agent. If a Managing Agent shall
resign, then the Purchasers in the related Purchase Group shall appoint a
successor Managing Agent during such thirty-day period. If for any reason no
successor Managing Agent
36
is appointed by the related Purchase Group during such thirty-day period, then
effective upon the termination of such thirty-day period, the Purchasers in the
related Purchase Group shall perform all of the duties of the related Managing
Agent hereunder and under the other Transaction Documents and the Seller shall
make all payments in respect of the Aggregate Unpaids directly to the applicable
Purchasers and for all purposes shall deal directly with such Purchasers. After
the effectiveness of any retiring Managing Agent's resignation hereunder, the
retiring Managing Agent shall be discharged from its duties and obligations
hereunder and under the other Transaction Documents and the provisions of this
Article IX and Article VIII shall continue in effect for its benefit with
respect to any actions taken or omitted to be taken by it while it was a
Managing Agent under this Agreement and under the other Transaction Documents.
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS
Section 10.1. Assignments. (a) The Seller, GP, Inc. and each
Investor hereby agree and consent to the complete or partial assignment by each
Conduit of all of its rights under, interest in, title to and obligations under
this Agreement to the Investors pursuant to a Liquidity Agreement or to any
other Person, and upon such assignment, such Conduit shall be released from its
obligations so assigned. Further, the Seller, GP, Inc. and each Investor hereby
agree that any assignee of any Conduit of this Agreement or all or any of the
Receivable Interests of such Conduit shall have all of the rights and benefits
under this Agreement as if the term "Conduit" explicitly referred to such party,
and no such assignment shall in any way impair the rights and benefits of such
Conduit hereunder. The Seller shall not have the right to assign its rights or
obligations under this Agreement.
(b) Any Investor may at any time and from time to time assign
to one or more Persons ("Purchasing Investors") all or any part of its rights
and obligations under this Agreement pursuant to an assignment agreement, in a
form satisfactory to the related Managing Agent (the "Assignment Agreement"),
executed by such Purchasing Investor and such selling Investor. The consent of
the Conduit in such assigning Investor's Purchase Group shall be required prior
to the effectiveness of any such assignment. Each assignee of an Investor must
have a short-term debt rating of A-1 or better by Standard & Poor's Ratings
Group and P-1 by Xxxxx'x Investors Service, Inc. and must deliver to the Agent
an enforceability opinion in form and substance satisfactory to the Agent prior
to the effectiveness of any Assignment Agreement. Upon delivery of the executed
Assignment Agreement to the Agent and the related Managing Agent, such selling
Investor shall be released from its obligations hereunder to the extent of such
assignment. Thereafter the Purchasing Investor shall for all purposes be an
Investor party to this Agreement and shall have all the rights and obligations
of an Investor under this Agreement to the same extent as if it were an original
party hereto and no further consent or action by the Seller, the Purchasers, the
Agent or any Managing Agent shall be required.
(c) Each of the Investors agrees that in the event that it
shall cease to have a short-term debt rating of A-1 or better by Standard &
Poor's Corporation and P-1 by Xxxxx'x Investors Service, Inc. (an "Affected
Investor"), such Affected Investor shall be obliged, at the request of the
Conduit or the Managing Agent in such Investor's Purchase Group, to assign all
of
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its rights and obligations hereunder to (x) another Investor or (y) another
financial institution nominated by such Managing Agent and acceptable to such
Conduit and the Seller, and willing to participate in this Agreement through the
Liquidity Termination Date in the place of such Affected Investor; provided that
the Affected Investor receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Investor's Funded Pro Rata Share of the
Capital and Discount owing to the Investors and all accruing but unpaid fees and
other costs and expenses payable in respect of its Receivable Interests.
Section 10.2. Participations. Any Investor may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Commitment Pro Rata Share of the
Receivable Interests of the Investors, its obligation to make purchases
hereunder or any other interest of such Investor hereunder. Notwithstanding any
such sale by an Investor of a participating interest to a Participant, such
Investor's rights and obligations under this Agreement shall remain unchanged,
such Investor shall remain solely responsible for the performance of its
obligations hereunder, and the Seller, the Conduits, the Managing Agents and the
Agent shall continue to deal solely and directly with such Investor in
connection with such Investor's rights and obligations under this Agreement.
Each Investor agrees that any agreement between such Investor and any such
Participant in respect of such participating interest shall not restrict such
Investor's right to agree to any amendment, supplement, waiver or modification
to this Agreement, except for any amendment, supplement, waiver or modification
described in clause (i) of Section 11.1(b).
Section 10.3. Additional Purchase Groups. Upon the Seller's
request and with the consent of the Agent, additional Purchase Groups may be
added to this Agreement at any time by the execution and delivery of a Joinder
Agreement by the members of such proposed additional Purchase Group, the Seller,
the Agent and each of the Managing Agents, which execution and delivery shall
not be unreasonably refused by such parties. Upon the effective date of such
Joinder Agreement, (i) each Person specified therein as a "Conduit" shall become
a party hereto as a Conduit, entitled to the rights and subject to the
obligations of a Conduit hereunder, (ii) each Person specified therein as an
"Investor" shall become a party hereto as an Investor, entitled to the rights
and subject to the obligations of an Investor hereunder, (iii) each Person
specified therein as a "Managing Agent" shall become a party hereto as a
Managing Agent, entitled to the rights and subject to the obligations of a
Managing Agent hereunder and (iv) the Purchase Limit shall be increased by an
amount equal to the aggregate Commitments of the Investor(s) party to such
Joinder Agreement. On or prior to the effective date of such Joinder Agreement,
the Seller, the new Conduit and the new Managing Agent shall enter into a fee
letter for purposes of setting forth the fees payable to the members of such
Purchase Group in connection with this Agreement, which fee letter shall be
considered a "Fee Letter" for all purposes of this Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Waivers and Amendments. (a) No failure or delay
on the part of the Agent, any Managing Agent, any Purchaser, any Swap
Counterparty, or the Seller in
38
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 11.1(b). The Conduits, the Seller, the Managing
Agents and the Agent may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of each affected Purchaser, (A) extend
the Liquidity Termination Date or the date of any payment or deposit of
Collections by the Seller or the Collection Agent, (B) reduce the rate
or extend the time of payment of Discount (or any component thereof),
(C) reduce any fee payable to the Agent or the Managing Agent for the
benefit of the Purchasers, (D) except pursuant to Article X hereof,
change the amount of the Capital of any Purchaser, a Purchaser's Funded
Pro Rata Share, an Investor's Commitment Pro Rata Share or an
Investor's Commitment, (E) amend, modify or waive any provision of this
Section 11.1(b), (F) consent to or permit the assignment or transfer by
the Seller of any of its rights and obligations under this Agreement,
(G) change the definition of "Eligible Receivable," "Loss Reserve," or
"Loss Percentage," or (H) except in the manner expressly provided
herein, release the Receivable Interest, or any other security interest
or ownership interest, of any Purchaser granted hereunder in the
Receivables, the Related Security and the Collections, or (I) amend or
modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (H) above
in a manner which would circumvent the intention of the restrictions
set forth in such clauses; or
(ii) without the written consent of the Agent or any Managing
Agent, amend, modify or waive any provision of this Agreement if the
effect thereof is to affect the rights or duties of the Agent or such
Managing Agent; or
(iii) without the written consent of a Swap Counterparty,
amend, modify or waive any provision of this Agreement if the effect
thereof is to adversely affect the rights or duties of such Swap
Counterparty; or
(iv) without the written consent of GP, Inc., amend or modify
any provision set forth in Section 5.3, or 5.5.
Notwithstanding the foregoing, (i) without the consent of the Investors or any
Swap Counterparty, the Agent and any Managing Agent may, with the consent of the
Seller, amend this Agreement solely to add additional Persons as Investors with
respect to such Managing Agent's Purchase Group hereunder and (ii) without the
consent of the Seller, the Agent, any Managing Agent, any Swap Counterparty and
any Conduit may enter into amendments to modify any of the terms or provisions
of Article II, Article IX (other than Section 9.8 therein),
39
Article X, Section 11.13 or any other provision of this Agreement, provided that
such amendment has no negative impact upon TBTR Partnership or GP, Inc. Any
modification or waiver made in accordance with this Section 11.1 shall apply to
each of the Purchasers equally and shall be binding upon each party hereto.
Section 11.2. Notices. (a) Except as provided in subsection
(b) below, all communications and notices provided for hereunder shall be in
writing (including bank wire, telecopy or electronic facsimile transmission or
similar writing) and shall be given to the other parties hereto at their
respective addresses or telecopy numbers set forth on the signature pages
hereof. All such communications and notices shall, when mailed, telecopied,
telegraphed, telexed or cabled, be effective when received through the mails,
transmitted by telecopy, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, except that
communications and notices to the Agent, any Managing Agent or any Purchaser
pursuant to Article I or II shall not be effective until received by the
intended recipient.
(b) The Seller hereby authorizes the Agent to effect purchases
and each Managing Agent to make Tranche Period and Discount Rate selections
based on telephonic notices made by any Person whom the Agent or such Managing
Agent, as applicable, in good faith believes to be acting on behalf of the
Seller. The Seller agrees to deliver promptly to the Agent or the applicable
Managing Agent a written confirmation of each telephonic notice signed by an
authorized officer of the Seller. However, the absence of such confirmation
shall not affect the validity of such notice. If the written confirmation
differs from the action taken by the Agent or such Managing Agent, as
applicable, the records of the Agent or such Managing Agent, as applicable,
shall govern absent manifest error.
Section 11.3. Ratable Payments. If any Purchaser, whether by
setoff or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Purchaser (other than payments received with
respect to Discount, fees or pursuant to Section 8.2 or 8.3 or Section 8.1 if
the applicable losses are not incurred by other Purchasers) in a greater
proportion than that received by any other Purchaser entitled to receive a
ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon
demand, to purchase for cash without recourse or warranty a portion of the
Aggregate Unpaids held by the other Purchasers so that after such purchase each
Purchaser will hold its ratable proportion of the Aggregate Unpaids; provided
that if all or any portion of such excess amount is thereafter recovered from
such Purchaser, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
Section 11.4. Protection of Ownership Interests of the
Purchasers. (a) The Seller agrees that from time to time, at its expense, it
will promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary, or that the Agent or any Managing Agent may
reasonably request, to perfect, protect or more fully evidence the Receivable
Interests, or to enable the Agent, the Purchasers, or any Swap Counterparty to
exercise and enforce their rights and remedies hereunder in respect of the
Receivables, the Related Security and the Collections. The Agent may, or the
Agent may direct the Seller to, notify the Obligors of Receivables, at any time
and at the Seller's expense, of the ownership interests of the Purchasers
40
under this Agreement and may also direct that payments of all amounts due or
that become due under any or all Receivables be made directly to the Agent or
its designee. The Seller shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.
(b) If the Seller, GP, Inc. or the Collection Agent fails to
perform any of its obligations hereunder, the Agent, any Managing Agent or any
Purchaser may (but shall not be required to) perform, or cause performance of,
such obligation. The Agent, such Managing Agent or such Purchaser shall give the
Seller, GP, Inc. or the Collection Agent, as applicable, three Business Days'
notice before taking any such action; provided that, if, in the reasonable
judgment of the Agent or such Managing Agent, the giving of such notice or any
delay in taking the related action would materially adversely affect the ability
of the Agent, the Managing Agents or the Purchasers to exercise any of their
rights hereunder, or the Purchasers' interest in the Receivables generally or
the collectibility of the Receivables generally (or any material portion
thereof), the Agent, such Managing Agent or such Purchaser shall not be required
to give such notice. The Agent's, such Managing Agent's or such Purchaser's
costs and expenses incurred in connection with any such action shall be payable
by the Seller (if the Collection Agent that fails to so perform is the Seller or
an Affiliate thereof) as provided in Section 8.3, as applicable. The Seller, GP,
Inc. and the Collection Agent each irrevocably authorizes the Agent at any time
and from time to time in the sole discretion of the Agent, and appoints the
Agent as its attorney-in-fact, to act on behalf of the Seller, GP, Inc. and the
Collection Agent (i) to execute on behalf of the Seller as debtor and to file
financing statements necessary or desirable in the Agent's sole discretion to
perfect and to maintain the perfection and priority of the interest of the
Purchasers in the Receivables and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as the Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Purchasers in the Receivables.
This appointment is coupled with an interest and is irrevocable.
Section 11.5. Confidentiality. (a) The Seller, the Collection
Agent, the Purchasers, the Agent, the Managing Agents and GP, Inc. shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of the Transfer Agreement, this Agreement and the other
confidential proprietary information obtained in connection with the
structuring, negotiating and execution of the transactions contemplated herein
and therein, except that (i) the Seller, the Collection Agent, the Purchasers,
the Agent, the Managing Agents and GP, Inc., and their respective officers and
employees, may disclose such information to its external accountants and
attorneys and as required by any law, rule, regulation, direction, request or
order of any judicial, administrative or regulatory authority or proceedings
(whether or not having the force or effect of law) and (ii) the Agent, the
Managing Agents and the Purchasers may disclose such information to the rating
agencies, any commercial paper dealers and to any providers of credit
enhancement or liquidity to any Conduit and (iii) the Agent, the Managing Agents
and the Purchasers may disclose such information to prospective or actual
assignees or participants.
(b) Anything herein to the contrary notwithstanding, each of
the Seller and GP, Inc. hereby consents to the disclosure of any nonpublic
information with respect to it (i) to the Agent, the Managing Agents, the
Investors or the Conduits by each other, (ii) by the Agent, or the Managing
Agents or the Purchasers to any prospective or actual assignee or participant of
41
any of them or (iii) by the Agent, any Conduit or Managing Agent to any rating
agency, Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to such Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which such Managing
Agent provides managerial services or acts as the administrative agent and to
any officers, directors, employees, outside accountants and attorneys of any of
the foregoing, provided that the recipients are advised of the confidential
nature thereof. In addition, the Purchasers, the Agent or any Managing Agent may
disclose any such nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law).
Section 11.6. Bankruptcy Petition. The Seller, GP, Inc., the
Agent, each Managing Agent, each Swap Counterparty and each Investor hereby
covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding senior Indebtedness of each Conduit, it
will not institute against, or join any other Person in instituting against, any
Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
Section 11.7. Limitation of Liability. Except with respect to
any claim arising out of the willful misconduct, gross negligence or bad faith
of any Conduit, any Managing Agent, the Agent, any Swap Counterparty or any
Investor, no claim may be made by the Seller, the Collection Agent or any other
Person against any Conduit, any Managing Agent, the Agent, any Swap Counterparty
or any Investor or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and the Seller
hereby waives, releases, and agrees not to xxx upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 11.8. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.
Section 11.9. CONSENT TO JURISDICTION. EACH OF TBTR
PARTNERSHIP AND GP, INC. HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY DOCUMENT EXECUTED BY TBTR PARTNERSHIP OR GP, INC. PURSUANT TO THIS
AGREEMENT AND EACH OF TBTR PARTNERSHIP AND GP, INC. HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS
42
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE
MANAGING AGENTS OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST TBTR PARTNERSHIP
OR GP, INC. IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
TBTR PARTNERSHIP OR GP, INC. AGAINST THE AGENT, THE MANAGING AGENTS OR ANY
PURCHASER OR ANY AFFILIATE OF THE AGENT, THE MANAGING AGENTS OR A PURCHASER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY TBTR
PARTNERSHIP OR GP, INC. PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
Section 11.10. WAIVER OF JURY TRIAL. THE AGENT, EACH MANAGING
AGENT, TBTR PARTNERSHIP, GP, INC., EACH SWAP COUNTERPARTY AND EACH PURCHASER
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY TBTR PARTNERSHIP OR GP, INC. PURSUANT TO THIS AGREEMENT OR THE
RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 11.11. Integration; Survival of Terms. (a) This
Agreement, the Fee Letter, and each Interest Rate Swap Agreement contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) The provisions of Article VIII and Section 11.6 shall
survive any termination of this Agreement.
Section 11.12. Counterparts; Severability. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 11.13. Agent Roles. (a) Bank One Roles. Each of the
Investors acknowledges that Bank One acts, or may in the future act, (i) as
Agent for the Purchasers and as Managing Agent for the Purchasers in its
Purchase Group, (ii) as issuing and paying agent for Falcon's Commercial Paper,
(iii) to provide credit or liquidity enhancement for the timely payment for such
Commercial Paper and (iv) to provide other services from time to time for some
or all of the Purchasers (collectively, the "Bank One Roles"). Without limiting
the generality of this Section 11.13, each Managing Agent and each Purchaser
hereby acknowledges and consents to any and all Bank One Roles and agrees that
in connection with any Bank One
43
Role, except as otherwise set forth herein, Bank One may take, or refrain from
taking, any action which it, in its discretion, deems appropriate.
(b) Managing Agent Roles. Each of the Investors acknowledges
that each Person that serves as a Managing Agent hereunder acts, or may in the
future act (i) as Managing Agent for a Conduit and the other Purchasers in its
Purchase Group, (ii) as issuing and paying agent for such Conduit's Commercial
Paper, (iii) to provide credit or liquidity enhancement for the timely payment
for such Commercial paper and (iv) to provide other services from time to time
for some or all of the Conduits (collectively, the "Managing Agent Roles").
Without limiting the generality of this Section 11.13(b), each Investor hereby
acknowledges and consents to any and all Managing Agent Roles and agrees that in
connection with any Managing Agent Role, the applicable Managing Agent may take,
or refrain from taking, any action that it in its discretion, deems appropriate.
Section 11.14. Amendment and Restatement. (a) This Agreement
amends and restates in its entirety the Existing RPA. Upon the effectiveness of
this Agreement, the terms and provisions of the Existing RPA shall, subject to
this Section 11.14, be superseded in their entirety by this Agreement.
Notwithstanding the amendment and restatement of the Existing RPA by this
Agreement, the Seller shall continue to be liable to the Investors, Falcon and
the Agent with respect to agreements under the Existing RPA to indemnify any of
Falcon, the Agent or any Investor in connection with events or conditions
arising or existing prior to the effective date of this Agreement, including,
without limitation, such agreements under the definition therein of "Capital" or
set forth in Section 1.8, 1.9, Article VIII or Section 11.4 thereof. This
Agreement is given in substitution for the Existing RPA and not as payment of
the obligations of the Seller thereunder, and is in no way intended to
constitute a novation of the Existing RPA. Upon the effectiveness of this
Agreement, each reference to the Existing RPA in any other document, instrument
or agreement executed and/or delivered in connection therewith shall mean and be
a reference to this Agreement.
(b) Except as assigned pursuant to Section 11.15, each
Receivable Interest existing immediately prior to giving effect to this
Agreement shall continue in full force and effect after giving effect to this
Agreement.
(c) Notwithstanding Section 5.2(f) of the Existing RPA,
pursuant to Section 5.2(f) of this Agreement, each of the Managing Agents hereby
consents to the amendment and restatement of the "Existing Transfer Agreement"
(defined in the Transfer Agreement) as the Transfer Agreement.
Section 11.15. Sale and Assignment. (a) In consideration of
the payment of $47,333,333.33 on the date herof, (i) Falcon hereby sells and
assigns to Eagle, and Eagle hereby purchases and assumes from Falcon, a
33.3333333% interest in the outstanding Capital funded by Falcon, and to
Falcon's rights and obligations as a Conduit under this Agreement, and (ii) Bank
One hereby sells and assigns to Fleet National Bank, and Fleet National Bank
hereby purchases and assumes from Bank One, a 33.0000000% interest in and to
Bank One's rights and obligations as an Investor under this Agreement; provided,
however, that Fleet National Bank shall have no rights or obligations with
respect to any Purchaser Group except that in which it is a member.
44
(b) Each of Falcon and Bank One (i) represents and warrants
that it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any lien created by it;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, the other Transaction Documents or any other
instrument or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the other Transaction Documents, the Receivable Interest or any such other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of TBTR Partnership, as Seller and as Collection Agent, or
the Subservicer or the performance or observance by TBTR Partnership, as Seller
and as Collection Agent, or the Subservicer of any of their respective
obligations under this Agreement, the other Transaction Documents or any
instrument or document furnished pursuant thereto. If requested by the Agent,
each of Falcon, Bank One, Eagle and Fleet National Bank will execute and deliver
such further agreements and documents and take such other actions as the Agent
may reasonably request to evidence and give effect to the foregoing.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
45
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
THE BON-TON RECEIVABLES
PARTNERSHIP, L.P, as Seller
By: BTRGP, INC.
Its General Partner
By: /s/ H. Xxxx Xxxxxxxxx
Name: H. Xxxx Xxxxxxxxx
Title: Treasurer
0000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
BTRGP, INC.
By: /s/ H. Xxxx Xxxxxxxxx
Name: H. Xxxx Xxxxxxxxx
Title: Treasurer
0000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
Signature Page 1 to
Second Amended and Restated Receivables Purchase Agreement
BANK ONE, NA,
as Agent, Managing Agent and
as Swap Counterparty
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Director, Capital Markets
Bank One, NA
Asset-Backed Finance, Xxxxx 0000
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
FALCON ASSET SECURITIZATION
CORPORATION, as a Conduit
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Xxxxxx
c/o Bank One, NA, as Managing Agent
Asset-Backed Finance, Xxxxx 0000
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Signature Page 2 to
Second Amended and Restated Receivables Purchase Agreement
EAGLEFUNDING CAPITAL CORPORATION,
as a Conduit
By: FLEET SECURITIES, INC.,
as attorney-in-fact
By: /s/ Xxxx X. Xxxxxxx, III
Name:
Title:
000 Xxxxxxx Xxxxxx
Mail Stop MA DE 10011G
Xxxxxx, XX 00000
Fax: (000) 000-0000
FLEET SECURITIES, INC.,
as Managing Agent
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Director
000 Xxxxxxx Xxxxxx
Mail Stop MA DE 10011G
Xxxxxx, XX 00000
Fax: (000) 000-0000
Signature Page 3 to
Second Amended and Restated Receivables Purchase Agreement
INVESTORS:
Commitment BANK ONE, NA,
$100,000,000 as an Investor
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Director, Capital Markets
Bank One, NA
Asset-Backed Finance, Xxxxx 0000
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
$50,000,000 FLEET NATIONAL BANK.,
as an Investor
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Director
000 Xxxxxxx Xxxxxx
Mail Stop MA DE 10011G
Xxxxxx, XX 00000
Fax: (000) 000-0000
Total Commitments
$150,000,000
Signature Page 4 to
Second Amended and Restated Receivables Purchase Agreement
EXHIBITS AND SCHEDULES
EXHIBIT I GENERAL DEFINITIONS
EXHIBIT II JURISDICTION OF ORGANIZATION; PRINCIPAL PLACE OF BUSINESS AND CHIEF EXECUTIVE
OFFICE; LOCATION(S) OF RECORDS; FEDERAL EMPLOYER IDENTIFICATION NUMBER;
ORGANIZATIONAL IDENTIFICATION NUMBER; CORPORATE NAMES, TRADE NAMES OR ASSUMED
NAMES
EXHIBIT III LOCK-BOXES; LOCK-BOX ACCOUNTS; CONCENTRATION ACCOUNTS
EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE
EXHIBIT V FORMS OF COLLECTION ACCOUNT AGREEMENTS
EXHIBIT VI FORM OF CONTRACT(S)
EXHIBIT VII FORM OF MONTHLY REPORT
EXHIBIT VIII FORM OF WEEKLY REPORT
EXHIBIT IX FORM OF JOINDER AGREEMENT
EXHIBIT X FINANCIAL COVENANT DEFINITIONS
SCHEDULE A CLOSING LIST
SCHEDULE B COLLECTION ACTIVITIES DELEGATED BY THE SUBSERVICER
EXHIBIT I
GENERAL DEFINITIONS
As used in this Agreement, except for Section 7.1(i), the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Account" means, with respect to any Obligor, any type of
charge account under or pursuant to which such Obligor is permitted to make
purchases of inventory, goods, insurance and/or services or leases goods or
inventory, in any such case on credit. Such term shall include, without
limitation, a revolving credit account.
"Accrued Finance Charges" means, with respect to a Contract,
any finance, interest, late payment charges or similar charges owing by an
Obligor pursuant to such Contract.
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person; provided that any interest in the
Receivables granted to General Electric Capital Corporation, as administrative
agent for itself and the lenders under the "Credit Agreement" (as defined in
Exhibit X), pursuant to the "Intercreditor Agreement" (as defined in Exhibit X)
does not constitute an Adverse Claim.
"Affiliate" means any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
another Person or any Subsidiary of such other Person. Solely for purposes of
the definition herein of "Eligible Receivable", a Person shall be deemed to
control another Person if the controlling Person owns 10% or more of any class
of voting securities of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means Bank One in its capacity as Agent for the
Purchasers pursuant to Article IX, and not in its individual capacity as an
Investor, and any successor Agent appointed pursuant to Article IX.
"Aggregate Independent Amount" means the sum of the
Independent Amounts for all outstanding "Transactions" (as such term is defined
in the Interest Rate Swap Agreement).
"Aggregate Unpaids" means, at any time, an amount equal to the
sum of all accrued and unpaid Discount, Capital and all other amounts owed
(whether due or accrued) hereunder or under the Fee Letter to the Agent and the
Purchasers at such time.
"Agreement" means this Second Amended and Restated Receivables
Purchase Agreement, as it may be amended or modified and in effect from time to
time.
"Allocation Percentage" means, (i) the aggregate Receivable
Interest, expressed as a percentage, determined as of the Liquidation Day of
such Receivable Interest if such Liquidation Day has occurred solely as a result
of the Liquidity Termination Date having occurred with respect to all of the
Investors, and (ii) 100% in any other case; in any event, from and after the
occurrence of a Termination Event, the "Allocation Percentage" shall be 100%.
"Base Rate" means a rate per annum equal to the corporate base
rate, prime rate or base rate of interest, as applicable, announced by the
Reference Bank from time to time, changing when and as such rate changes.
"Breakage Fees" means any amounts payable by the Seller
pursuant to Section 6(e) of each Interest Rate Swap Agreement.
"Business Day" means any day on which banks are not authorized
or required to close in New York, New York or Chicago, Illinois and The
Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"Capital" of any Receivable Interest means, at any time, the
Purchase Price of such Receivable Interest (and after giving effect to any
adjustments contemplated in Section 1.5), minus the sum of the aggregate amount
of Collections and other payments received by the Agent which in each case are
applied to reduce such Capital; provided that such Capital shall be restored in
the amount of any Collections or payments so received and applied if at any time
the distribution of such Collections or payments are rescinded or must otherwise
be returned for any reason.
"Change of Control" means either (i) any change in ownership
of any class of stock or capital stock generally of The Bon-Ton Stores, Inc.
which would result in a change or transfer in the power to control the election
of a majority of the board of directors or in other indicia of majority voting
control to persons or entities other than M. Xxxxxx Xxxxxxxxxx, his heirs or
devisees, or any trusts of which any such Person serves as sole trustee now or
hereafter established for any of his family members (Xx. Xxxxxxxxxx, such heirs,
devisees and trusts being collectively, the "Grumbacher Interests") or (ii) a
decrease in the Grumbacher Interests' right to vote at shareholders' meetings to
an aggregate level less than 51%.
"Charged-Off Receivable" means a Receivable: (i) as to which
the Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 7.1(c) (as if references to the Seller therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off the Seller's books as uncollectible or (iv) which has been
identified by the Seller as uncollectible.
"Collateral Agent" means Bank One, in its capacity as
depositary of a Swap Cash Collateral Account for the benefit of Bank One, as
Swap Counterparty.
2
"Collection Account" means the Lock-Box Accounts, the
Concentration Accounts and any other account into which any Collections are
initially collected or deposited (an "Initial Deposit Account") or into which
Collections are initially concentrated following collection or deposit thereof
in any Initial Deposit Account.
"Collection Account Agreement" means (i) in the case of any
actual or proposed Lock-Box or Lock-Box Account, an agreement in substantially
the form of the "Lock-Box Agreement" set forth in Exhibit V hereto and (ii) in
the case of any actual or proposed Concentration Account, an agreement in
substantially the form of the "Custodial Agreement" set forth in Exhibit V
hereto.
"Collection Agent" means at any time the Person (which may be
the Agent) then authorized pursuant to Article VI to service, administer and
collect Receivables.
"Collection and Enforcement Costs" means, with respect to the
Agent and any Managing Agent, all reasonable costs and expenses of the Agent or
such Managing Agent, as applicable, including reasonable counsel fees and
expenses, in connection with (i) the collection of the Receivables, and (ii) the
enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following a Termination
Event.
"Collection Bank" means, at any time, any of the banks or
other financial institutions holding one or more Collection Accounts.
"Collection Notice" has the meaning assigned to such term in
Section 6.3.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all cash proceeds of Related Security with respect to such
Receivable and all amounts payable to the Purchasers by the Seller pursuant to
Section 1.9.
"Commercial Paper" means promissory notes of any Conduit
issued by such Conduit in the commercial paper market.
"Commitment" means, for each Investor, the commitment of such
Investor to purchase its Commitment Pro Rata Share of Receivable Interests from
the Seller, such Commitment Pro Rata Share not to exceed, in the aggregate, the
amount set forth opposite such Investor's name on the signature pages of this
Agreement, as such amount may be modified in accordance with the terms hereof.
"Commitment Pro Rata Share" means, for each Investor, the
Commitment of such Investor divided by the Purchase Limit.
"Concentration Account" means any of (i) the "Concentration
Account" identified on Exhibit III hereto or (ii) any other deposit account
established for the purpose of concentrating Collections received at the
Lock-Box Account(s) and directly at individual stores of the Originator and in
respect of which the Seller shall have complied (or shall have caused the
3
Originator to comply) with Sections 3.1(j), 5.2(b) and 5.2(c) and the other
terms and conditions of this Agreement.
"Conduit" means Falcon, Eagle, any Person that becomes party
to this Agreement as a "Conduit" pursuant to Section 10.3 or, pursuant to
Section 10.1, any assignee of a Conduit.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, leases, invoices or other writings pursuant to which
such Receivable arises or which evidences such Receivable (including, without
limitation, all invoices, standard agreements with regard to the Account under
which such Receivable arises, and, to the extent they exist, credit slips and
sales contracts).
"CP Rate" means (a) with respect to any Tranche Period for any
Receivable Interest owned by Falcon, the rate, requested by the Seller and
agreed to by Falcon, equivalent to the rate (or if more than one rate, the
weighted average of the rates) at which Commercial Paper having a term equal to
the relevant Tranche Period may be sold by any placement agent or commercial
paper dealer reasonably selected by Falcon, as agreed between each such dealer
or agent and Falcon; provided, however, that if the rate (or rates) as agreed
between any such agent or dealer and Falcon is a discount rate (or rates), the
"CP Rate" for such Tranche Period shall be the rate (or if more than one rate,
the weighted average of the rates) resulting from Falcon's converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum; or
(b) with respect to any Tranche Period (or any portion
thereof) for any Receivable Interest (or any portion thereof) owned by Eagle,
the per annum rate, requested by the Seller and agreed to by Eagle, equivalent
to the sum of (i) the weighted average of the per annum rates paid or payable by
Eagle from time to time as interest on, or otherwise (by means of interest rate
xxxxxx or otherwise) in respect of the commercial paper issued by Eagle that are
allocated, in whole or in part, by Eagle's related Managing Agent (on behalf of
Eagle) to fund or maintain such Receivable Interest (or any portion thereof)
during such Tranche Period (or any portion thereof), as determined by such
Managing Agent (on behalf of Eagle), which rates shall reflect and give effect
to the commissions and fees of commercial paper placement agents and dealers,
and issuing and paying agents incurred in respect of such commercial paper, plus
(ii) all Early Collection Fees incurred during such Tranche Period related to
any prepayment of any Receivable Interest during such Tranche Period; provided,
however, that if any component of the rate described above is a discount rate,
in calculating the "CP Rate" for such Tranche Period (or portion thereof) for
such Receivable Interest, Eagle's related Managing Agent shall for such
component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum.
4
"Credit and Collection Policy" means the Originator's credit
and collection policies and practices relating to Contracts and Receivables
existing on the date hereof.
"Deemed Collections" means the aggregate of all amounts owing
pursuant to Section 1.9.
"Defaulted Receivable" means each Receivable arising from an
Account as to which any payment, or any portion thereof, remains unpaid for 150
or more days past the payment due date specified in the billing statement on
which such amount first appeared as due and payable.
"Delinquency Ratio" means, as of any date, a percentage equal
to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables as of the last day of the most recently ended calendar month divided
by (ii) the aggregate Outstanding Balance of all Receivables as of the last day
of the most recently ended calendar month.
"Delinquent Receivable" means each Receivable arising from an
Account as to which any payment, or any portion thereof, remains unpaid for more
than 90 days past the payment due date specified in the billing statement on
which such amount first appeared as due and payable.
"Dilution Ratio" means, in respect of any fiscal month a
percentage equal to (i) the DR Multiplier times the aggregate amount of
Dilutions which occurred during such fiscal month, divided by (ii) the Net
Receivables Balance on the last day of such fiscal month. The "DR Multiplier"
shall be one and one-half (1.50); provided, that if, as of the last day of any
fiscal month, the average Loss-to-Liquidation Ratio in respect of the three
fiscal months then most recently ended shall exceed 3.0%, the DR Multiplier
shall at all times thereafter be two (2) until the average Loss-to-Liquidation
Ratio in respect of the three fiscal months then ended shall, for a period of
six consecutive months, have been equal to or less than 3.0%.
"Dilution Reserve" means, at an time, an amount equal to (i)
the greater of (a) 6.0% and (b) the average Dilution Ratio in respect of the
three fiscal months then most recently ended, multiplied by (ii) the Net
Receivables Balance.
"Dilutions" means, at any time, the aggregate amount of
reductions in the Outstanding Balances of the Receivables as a result of any
setoff, discount, adjustment or otherwise, other than cash Collections on
account of the Receivables. The term "Dilutions" shall not include the writing
off of a Receivable in the ordinary course of business due to a failure on the
part of the Obligor thereon to pay (or a discharge of such Obligor in any
insolvency or bankruptcy proceeding) which failure is not related to any action
or omission on the part of, or any claim against, the Seller, the Originator or
any of their Affiliates.
"Discount" means, for each Receivable Interest for any Tranche
Period:
AD
DR x C x ---
360
5
DR = the Discount Rate for such Receivable Interest for
such Tranche Period;
C = the Capital of such Receivable Interest during such
Tranche Period; and
AD = the actual number of days elapsed during such
Tranche Period;
provided, that no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and provided, further, that Discount for any Tranche Period
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason.
"Discount Rate" means, subject to Section 1.3(c), the LIBO
Rate, the CP Rate or the Base Rate, as applicable.
"Early Collection Fee" means, for any Receivable Interest
which has its Capital reduced, or its Tranche Period terminated prior to the
date on which it was originally scheduled to end, the excess, if any, of (i) the
Discount that would have accrued during the remainder of the Tranche Period
subsequent to the date of such reduction or termination on the Capital of such
Receivable Interest if such reduction or termination had not occurred, over (ii)
the sum of (a) to the extent all or a portion of such Capital is allocated to
another Receivable Interest of the same Purchaser, the Discount actually accrued
during such period on such Capital for the new Receivable Interest of the same
Purchaser, and (b) to the extent such Capital is not allocated to another
Receivable Interest of the same Purchaser, the income, if any, actually received
during such period by the holder of such Receivable Interest from investing the
portion of such Capital not so allocated.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) is not an Affiliate of any of the
parties hereto; and (b) is not a government or a governmental
subdivision or agency,
(ii) the Obligor of which is not the Obligor of any Defaulted
Receivable or any Charged-Off Receivable,
(iii) which is not a Defaulted Receivable or a Charged-Off
Receivable,
(iv) which is an account receivable representing all or part
of the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended,
(v) which is an "account" or "general intangible" within the
meaning of Section 9-102 of the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United States
dollars in the United States,
6
(vii) which, together with the related Contract, is in full
force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable by the Seller against
such Obligor in accordance with its terms subject to no offset,
counterclaim or other defense,
(viii) which arises under a Contract which (A) does not
require the Obligor under such Contract to consent to the transfer,
sale or assignment of the rights and duties of the Seller or the
Originator (or any other originator) under such Contract and (B) does
not contain a confidentiality provision that purports to restrict the
ability of the Agent, any Managing Agent or any Purchaser to exercise
its rights under this Agreement, including, without limitation, its
right to review the Contract,
(ix) which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the Obligor or any other Adverse Claim,
(x) as to which the Originator (or, if other than The Bon-Ton
Department Stores, Inc., the applicable originator) of such Receivable
has satisfied and fully performed all obligations on its part with
respect to such Receivable required to be fulfilled by it,
(xi) all right, title and interest to and in which has been
validly transferred by the Originator to the Seller under and in
accordance with the Transfer Agreement, and the Seller has good and
marketable title thereto free and clear of any Adverse Claim,
(xii) which has been posted to the applicable Account of the
Obligor thereon,
(xiii) (A) which does not arise from an Account which has been
classified by the Seller, the Originator or the Collection Agent as
being cancelled, counterfeit or fraudulent, and (B) if the card issued
in connection with the related Account has been lost or stolen, the
Obligor thereon has not asserted the occurrence of any unauthorized
charges thereon,
(xiv) which was created in compliance, and continues to be in
compliance, in each case, in all material respects with all laws
(including, without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy)
applicable to the Seller and to the Originator (and, if other than the
Originator, the originator in respect of such Receivable) and pursuant
to a Contract which complies in all material respects with all such
laws,
(xv) which satisfies all applicable requirements of the Credit
and Collection Policy, and
(xvi) which (A) arises in the ordinary course of business of
the Originator from an authorized use of an Account with the Originator
in connection with the purchase of goods or services of goods by the
applicable Obligor from the Originator, and (B) arises solely from the
sale or the provision of goods or services to the related Obligor by
the
7
Originator, and not by any other Person (in whole or in part); provided
that a Receivable that meets the criteria set forth in this definition
but for this clause (xvi) (including without limitation, clause (xv)
above) shall nonetheless constitute an "Eligible Receivable" if:
(1) such Receivable arises from the purchase of goods
or services from a Person that is either (a) a wholly-owned
Subsidiary of the Originator, (b) a Person that has been
merged into the Originator or (c) a Person all or a
substantial part of the assets in respect of which the
applicable Obligor is part of the associated "customer base"
have been acquired by the Originator,
(2) such Receivable arises from the purchase of goods
or services with the use of (a) an Account or (b) a charge
account all the rights and obligations of the issuer in
connection with which Account have been assigned to and
assumed by the Originator,
(3) the Outstanding Balance of such Receivable,
together with the aggregate Outstanding Balance of all other
Receivables that constitute Eligible Receivables by reason of
this proviso does not exceed an amount equal to 10% of the
Outstanding Balance of all Eligible Receivables at such time,
or such other higher percentage as may be agreed to by each of
the Managing Agents (such agreement not to be unreasonably
withheld and, upon any such revision, Fleet Securities shall
notify the rating agencies then rating the commercial paper of
Eagle at the request of Fleet Securities or Eagle, of such
revision), and
(4) the Seller shall have provided such information
with respect to such Receivable as any Managing Agent may
reasonably request to confirm that such Receivable is an
Eligible Receivable hereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Excess Spread" means, for any fiscal month, a per annum rate
equal to (i) the Portfolio Yield for such month, minus (ii) the weighted average
Discount Rate applicable to the Receivable Interests of the Purchasers during
such month, minus (iii) 2%, minus (iv) all fees and expenses (expressed as a
percentage of the Purchase Limit) then due and payable by the Seller to the
Agent for its own account or for the account of any Purchaser and/or Investor.
"Existing RPA" has the meaning assigned to that term in the
Preliminary Statements.
"Exposure" means for any Business Day the amount, if any, that
the relevant Swap Counterparty determines would be payable to it by the Seller
(expressed as a positive number) or by it to the Seller (expressed as a negative
number) pursuant to Section 6(e)(ii)(2)(A) of the relevant Interest Rate Swap
Agreement as if all "Transactions" thereunder had been terminated as of close of
business, New York City time, on the preceding Business Day; provided that
"Market Quotation" for all Interest Rate Swap Agreements will be determined by
8
such Swap Counterparty using its estimates at mid-market of the amounts that
would be paid for "Replacement Transactions" (each term within quotes having the
meaning given to it in the Interest Rate Swap Agreement).
"Facility Account" means the Seller's Account No. 52-56135 at
Bank One.
"Facility Termination Date" means the earliest of (i) the
latest Liquidity Termination Date, as such date may be extended pursuant to the
terms of Section 1.13 from time to time, (ii) the date the Seller shall exercise
its right to repurchase the outstanding Receivable Interests pursuant to Section
2.1 and (iii) any date following the occurrence, and during the continuance, of
any Termination Event which the Required Investors or any Managing Agent
declares to be the Facility Termination Date.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during such period equal
to (a) the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Governments Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Reference Bank from three federal funds brokers of recognized
standing selected by it.
"Fee Letter" means each letter agreement entered into by the
Seller with each Managing Agent and/or other members of such Managing Agent's
Purchase Group specifying certain fees to be paid by the Seller in connection
with this Agreement, as each such letter agreement may be amended or modified
from time to time.
"Finance Charge Collections" means, with respect to any
Receivable, those cash collections and other cash proceeds in respect of such
Receivable that are payments for any Accrued Finance Charges.
"Fiscal" means, in reference to any period, such fiscal period
of The Bon-Ton Department Stores, Inc.
"Funded Pro Rata Share" means, for each Purchaser, at any
time, the aggregate Capital funded by such Purchaser divided by the aggregate
Capital of all Purchasers, at such time.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of any
Conduit, including any Liquidity Agreement.
"Funding Source" means (i) any Investor, (ii) any Managing
Agent or (iii) any insurance company, bank or other financial institution
providing liquidity, credit enhancement or back-up purchase support or
facilities to a Conduit.
9
"GP, Inc." means BTRGP, Inc., a Pennsylvania corporation.
"Incremental Purchase" means a purchase of one or more
Receivable Interests which increases the total outstanding Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Independent Amount" means the amount specified as such in the
"Confirmation" for each "Transaction" (as such terms are defined in the Interest
Rate Swap Agreement).
"In-Store Collections" means any cash, instruments or other
payment items remitted by any Obligor toward payment of any Receivable at any
store location of the Originator.
"Intended Characterization" means, for income tax purposes,
the characterization of the acquisition by the Purchasers of Receivable
Interests as a loan or loans by the Purchasers to the Seller secured by the
Receivables, the Related Security and the Collections.
"Interest Rate Swap Agreement" means any ISDA Master Agreement
(including all "Schedules" and "Confirmations" constituting a part thereof)
between the entity acting as Swap Counterparty and the Seller under which the
transactions governed thereby provide for either (i) the Seller to make fixed
rate payments to such Swap Counterparty and for such Swap Counterparty to make
floating rate payments to the Seller, or (ii) such Swap Counterparty to make
fixed rate payments to the Seller and for the Seller to make floating rate
payments to such Swap Counterparty.
"Interest Rate Swap Obligations" means all amounts owing by
the Seller under an Interest Rate Swap Agreement, including without limitation
the net amount owing by the Seller under such Interest Rate Swap Agreement on an
Interest Rate Swap Settlement Date, and Breakage Fees.
"Interest Rate Swap Settlement Date" means the first Business
Day of each calendar month.
"Investors" means the financial institutions listed on the
signature pages of this Agreement under the heading "Investors" and their
respective successors and assigns.
10
"Joinder Agreement" shall mean an agreement substantially in
the form of Exhibit IX among the Managing Agent and Purchasers of a new Purchase
Group, the Seller, the Collection Agent and the Agent.
"LIBO Rate" means the rate per annum equal to the sum of (i)
(a) the rate at which deposits in U.S. Dollars are offered by the Reference Bank
to first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Tranche
Period, such deposits being in the approximate amount of the Capital of the
Receivable Interest to be funded or maintained, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Tranche Period
plus (ii) 0.75% per annum. The LIBO Rate shall be rounded, if necessary, to the
next higher 1/16 of 1%.
"Liquidity Agreement" means an agreement entered into by a
Conduit with the Investors in its Purchase Group in connection herewith for the
purpose of providing liquidity with respect to the Capital funded by such
Conduit under this Agreement.
"Liquidation Day" means, for any Receivable Interest, the
earliest to occur of (i) any Business Day so designated by the Agent or any
Managing Agent on or at any time following any day on which the conditions
precedent set forth in Section 4.2 are not satisfied, (ii) any Business Day so
designated by the Seller, the Agent or any Managing Agent after the occurrence
of a Termination Event and (iii) the Business Day immediately prior to the
occurrence of a Termination Event set forth in Section 7.1(c).
"Liquidity Termination Date" means, with respect to each
Investor, January ___, 2004, unless an extension of the Liquidity Termination
Date applicable to an individual Investor has been agreed to by such Investor
pursuant to Section 1.13. In such case, the Liquidity Termination Date for such
Investor, and only such Investor, will be that Liquidity Termination Date so
agreed to by such Investor pursuant to Section 1.13.
"Lock-Box" means any of (i) the "Lock-Box" identified on
Exhibit III hereto or (ii) any other lock-box established for the purpose of
receiving and processing Collections remitted by mail and in respect of which
the Seller shall have complied (or shall have caused the Originator to comply)
with Sections 3.1(j), 5.2(b) and 5.2(c) and the other terms and conditions of
this Agreement.
"Lock-Box Account" means any of (i) the "Lock-Box Account"
identified on Exhibit III hereto or (ii) any other lock-box account established
for the purpose of receiving and processing Collections remitted to the
Lock-Boxes and in respect of which the Seller shall have complied (or shall have
caused the Originator to comply) with Sections 3.1(j), 5.2(b) and 5.2(c) and the
other terms and conditions of this Agreement.
"Loss Percentage" means, at any time, the greater of (i) the
LP Multiplier times the highest Loss-to-Liquidation Ratio on any day during the
three complete fiscal month period then most recently ended or (ii) 12.0%. The
"LP Multiplier" shall be four (4); provided, that if, as of the last day of any
fiscal month, the average Loss-to-Liquidation Ratio in respect of the three
fiscal months then most recently ended shall exceed 3.0%, the LP Multiplier
shall at all times thereafter be five (5) until the average Loss-to-Liquidation
Ratio in respect of the three
11
fiscal months then ended shall, for a period of six consecutive months, have
been equal to or less than 3.0%.
"Loss Reserve" means, at any time, an amount equal to the Loss
Percentage multiplied by the Net Receivables Balance.
"Loss-to-Liquidation Ratio" means (a) for all months prior to
and including January, 2003, as at the last day of any such fiscal month, a
percentage equal to (x) the amount of Charged-Off Receivables which became
Charged-Off Receivables during such month, divided by (y) the aggregate amount
of Collections received during such month; or
(b) for all months after January, 2003, as at the last day of
any such fiscal month, a percentage equal to (x) the amount of principal of
Charged-Off Receivables which became Charged-Off Receivables during such month,
divided by (y) the aggregate amount of Principal Collections received during
such month.
"Managing Agent" means, as to any Conduit, the financial
institution responsible for the administration of such Conduit's commercial
paper program and related activities. As of the date hereof, Bank One is the
Managing Agent for Falcon and its Investors (Bank One), and Fleet Securities is
the Managing Agent for Eagle and its Investors (Fleet).
"Material Adverse Effect" means a material adverse effect on
(i) the financial condition or operations of the Seller or the Originator, (ii)
the ability of the Seller to perform its obligations under this Agreement, (iii)
the legality, validity or enforceability of this Agreement or any Collection
Account Agreement relating to a Collection Account into which a material portion
of Collections are deposited, (iv) any Purchaser's interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or the Collections with respect thereto, or (v) the collectibility of the
Receivables generally or of any material portion of the Receivables.
"Monthly Report" means a report, in substantially the form of
Exhibit VII hereto (appropriately completed), furnished by the Collection Agent
to the Agent and each Managing Agent pursuant to Section 6.5.
"Net Receivables Balance" means, at any time, (i) the
Outstanding Balance of Eligible Receivables at such time, reduced by (ii) the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
all Obligors that are natural persons not resident in the United States exceeds
an amount equal to the product of (A) 1% and (B) an amount equal to the average
of the Outstanding Balance of Eligible Receivables at the end of the two most
recently ended fiscal months.
"Obligor" means a Person obligated to make payments pursuant
to a Contract.
"Originator" means The Bon-Ton Department Stores, Inc., a
Pennsylvania corporation.
12
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Portfolio Yield" means (a) for any period ending on or before
February 1, 2003, a fraction expressed as a percentage, the numerator of which
is the sum of Accrued Finance Charges for such period minus the Outstanding
Balance of Defaulted Receivables for such period, and the denominator of which
is the average Outstanding Balance of Receivables for such period, or
(b) for any period ending after February 1, 2003, a fraction
expressed as a percentage, the numerator of which is the sum of Finance Charge
Collections for such period minus the Outstanding Balance of Defaulted
Receivables for such period, and the denominator of which is the average
Outstanding Balance of Receivables for such period.
"Potential Termination Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute a Termination
Event.
"Principal Collections" means, with respect to any Receivable,
those cash collections and other cash proceeds in respect of such Receivable
that are not Finance Charge Collections.
"Purchase Group" means any Conduit, its Investors and their
related Managing Agent.
"Purchase Limit" means the aggregate of the Commitments of the
Investors hereunder, as reduced from time to time in accordance with the terms
of this Agreement.
"Purchase Price" means, with respect to any Incremental
Purchase of a Receivable Interest, the amount paid to the Seller for such
Receivable Interest.
"Purchaser" means any Conduit or Investor, as applicable.
"Receivable" means the indebtedness and other obligations owed
to the Seller (without giving effect to any transfer or conveyance hereunder)
whether constituting an account, chattel paper, instrument or general
intangible, arising in connection with the sale or lease of goods or the
rendering of services under, with the use of or otherwise in connection with an
Account and includes, without limitation, the obligation to pay any Accrued
Finance Charges with respect thereto. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction.
13
"Receivable Interest" means, at any time, an undivided
percentage ownership interest associated with a designated amount of Capital,
Discount Rate and Tranche Period selected pursuant to Section 1.3 in (i) all
Receivables arising prior to the time of the most recent computation or
recomputation of such undivided interest pursuant to Section 1.4, (ii) all
Related Security with respect to such Receivables, and (iii) all Collections
with respect to, and other proceeds of, such Receivables. The "percentage
applicable" to each Receivable Interest shall mean the following ratio
(expressed as a percentage):
C
-------
NRB - R
C = the Capital of such Receivable Interest.
NRB = the Net Receivables Balance.
R = the sum of the Loss Reserve plus the Dilution
Reserve.
"Records" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"Reference Bank" means Bank One or such other bank as the
Agent shall designate with the consent of the Seller.
"Regulatory Change" means the adoption of any applicable law,
rule or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency. For avoidance of doubt, any
interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board shall constitute a "Regulatory Change".
"Reinvestment" has the meaning assigned to such term in
Section 1.6.
"Required Cure Period" means the earlier of (i) the one
Business Day after the delivery of any such Weekly Report or Monthly Report, as
applicable, that indicates that the aggregate Receivable Interests for all the
Purchasers exceeds 100%, and (ii) the seventh Business Day following any day
that the aggregate Receivable Interests for all the Purchasers exceeds 100%.
"Required Investors" means, at any time, two or more Investors
with aggregate Commitments in excess of 66-2/3% of the Purchase Limit.
"Required Minimum Balance" means, for each Interest Rate Swap
Agreement and for the related Swap Cash Collateral Account, as of any date of
determination, the amount
14
equal to the sum of the Exposure plus the Aggregate Independent Amount; provided
that if the Required Minimum Balance is a negative number, it shall be deemed to
be zero.
"Related Security" means, with respect to any Receivable:
(i) all of the Seller's interest in the inventory and goods
(including returned or repossessed inventory and goods), if any, the
sale or lease of which gave rise to such Receivable, and all insurance
contracts with respect thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements signed
by an Obligor describing any collateral securing such Receivable,
(iii) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract
related to such Receivable or otherwise,
(iv) all of the Seller's right, title and interest in, to and
under the Transfer Agreement,
(v) all service contracts and other contracts and agreements
associated with such Receivables,
(vi) all Records related to such Receivables,
(vii) all of the Seller's rights and interests under each of
the Interest Rate Swap Agreements, and
(viii) all proceeds of any of the foregoing.
"Reserve Requirement" means the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed against the Reference Bank in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Seller" means TBTR Partnership.
"Subservicer" has the meaning specified in Section 6.1(b).
"Subservicer Fee" has the meaning specified in Section 6.6.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such
15
Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Seller.
"Swap Cash Collateral Account" means (i) with respect to Bank
One as a Swap Counterparty, a deposit account held at Bank One in the name of
the Collateral Agent, identified by account number 0000000, which deposit
account secures the Interest Rate Swap Obligations owing to Bank One as Swap
Counterparty, and (ii) with respect to each Swap Counterparty other than Bank
One each deposit account held at such other bank as is acting as Swap
Counterparty, in the name of such Swap Counterparty, which deposit account
secures Interest Rate Swap Obligations owing to such Swap Counterparty.
"Swap Counterparty" means (i) Bank One or its successors or
assigns, in its role as swap counterparty under any Interest Rate Swap
Agreement, or (ii) any other financial institution from time to time party to an
Interest Rate Swap Agreement with the Seller as swap counterparty, or such
institution's successors or assigns, provided that (a) such institution is rated
at least A-1 by Standard & Poor's and P-1 by Moody's, and which swap
counterparty, together with the related Interest Rate Swap Agreement, has been
approved by the Agent, in its sole discretion, and (b) such swap counterparty
has executed an assumption agreement in form and substance acceptable to the
Agent, pursuant to which such swap counterparty becomes a party to this
Agreement as a "Swap Counterparty."
"TBTR Partnership" means The Bon-Ton Receivables Partnership,
L.P., a Pennsylvania limited partnership.
"Termination Date" means, for any Receivable Interest, the
Facility Termination Date, and with respect to a Receivable Interest of a
Conduit, that Business Day so designated by the Seller or such Conduit, by
notice to the other and to the Agent.
"Termination Event" has the meaning specified in Article VII.
"Tranche Period" means, with respect to any Receivable
Interest:
(a) if Discount for such Receivable Interest is
calculated with respect to a CP Rate, a period of days not to
exceed 270 days commencing on a Business Day requested by the
Seller and agreed to by the applicable Conduit;
(b) if Discount for such Receivable Interest is
calculated on the basis of the LIBO Rate, a period of one, two
or three months, or such other period, in each case, as may be
mutually agreeable to the applicable Managing Agent and the
Seller, commencing on a Business Day selected by the Seller
and agreed to by such Managing Agent or, after the Liquidation
Day, selected by the applicable Managing Agent pursuant to
this Agreement. Such Tranche Period shall end on the day in
the applicable succeeding calendar month which corresponds
numerically to the beginning day of such Tranche Period,
provided, however, that
16
if there is no such numerically corresponding day in such
succeeding month, such Tranche Period shall end on the last
Business Day of such succeeding month; and
(c) if Discount for such Receivable Interest is
calculated on the basis of the Base Rate, a period of days not
to exceed 30 days commencing on a Business Day selected by the
Seller.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Receivable Interest of which commences before the Termination Date and would
otherwise end on a date occurring after the Termination Date, such Tranche
Period shall end on the Termination Date. The duration of each Tranche Period in
respect of any Receivable Interest which commences after the Liquidation Day for
such Receivable Interest shall be of such duration as selected by the Agent.
"Transaction Documents" means, collectively, this Agreement,
the Transfer Agreement, the Fee Letter, each Collection Account Agreement and
all other instruments, documents and agreements executed and delivered by the
Seller in connection with the transactions contemplated by any of the foregoing.
"Transfer Agreement" means that certain Amended and Restated
Transfer Agreement, dated as of the date of this Agreement, between The Bon-Ton
Department Stores, Inc. and the Seller, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Weekly Report" means a report, in substantially the form of
Exhibit VIII hereto (appropriately completed), furnished by the Collection Agent
to the Agent and each Managing Agent pursuant to Section 6.5.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of Illinois, and not specifically
defined herein, are used herein as defined in such Article 9.
17
EXHIBIT II
JURISDICTION OF ORGANIZATION; PRINCIPAL PLACE OF BUSINESS AND CHIEF
EXECUTIVE OFFICE; LOCATION(S) OF RECORDS; FEDERAL EMPLOYER
IDENTIFICATION NUMBER; ORGANIZATIONAL IDENTIFICATION NUMBER;
CORPORATE NAMES, TRADE NAMES OR ASSUMED NAMES
Jurisdiction of Organization of the Seller and GP, Inc.:
Pennsylvania
Principal Place of Business and Chief Executive Office:
Seller: The Bon-Ton Receivables Partnership, L.P.
0000 Xxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
GP, Inc.: BTRGP, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
Location of Records of the Seller:
0000 Xxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
Queensgate Shopping Center
0000 Xxxxxxxxxx Xxxx
Xxxx, XX 00000
Federal Employer Identification Number:
Seller: 00-0000000
GP, Inc.: 00-0000000
Organizational Identification Number
Seller: 2641778
GP, Inc.: 2641524
Corporate Names, Trade Names or Assumed Names:
Seller: None.
GP, Inc.: BTRGP, Inc.
EXHIBIT III
LOCK-BOXES; LOCK-BOX ACCOUNTS; CONCENTRATION ACCOUNTS
Lock Box:
X.X. Xxx 00000
Xxxxxxxxx, XX 00000
Lock-Box Account:
First Union National Bank
Acct. No. 2014218771982
Philadelphia, PA
Concentration Account:
First Union National Bank
Acct. No. 2000011059530
Philadelphia, PA
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA, as Agent
This Compliance Certificate is furnished pursuant to that
certain Second Amended and Restated Receivables Purchase Agreement dated as of
January 17, 2003 (as amended, restated, supplemented or otherwise modified from
time to time, the "Agreement") by and among The Bon-Ton Receivables Partnership,
L.P. (the "Seller" and the "Collection Agent"), the Purchasers party thereto,
Bank One, NA (Main Office Chicago) ("Bank One") and Fleet Securities, Inc., as
Managing Agents (the "Managing Agents") and Bank One, as Agent (the "Agent").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ________________________ [of the
general partner in the Seller] [of the Seller];
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Seller during the accounting period covered
by the attached [financial statements] [Monthly Report];
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes a Termination Event or Potential Termination Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached [financial statements] [Monthly Report] or as of
the date of this Certificate, except as set forth below; and
4. The [financial statements] [Monthly Report] attached hereto
as Schedule I sets forth a true, accurate and complete statement of the matters
purportedly described therein, and does not omit to state any fact the omission
to state which renders such [financial statements] [Monthly Report] materially
misleading.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Seller has taken, is taking, or
proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ______ day of
________________, 20__.
____________________________
SCHEDULE I
to
COMPLIANCE CERTIFICATE
[In the case of a Compliance Certificate delivered pursuant to Section
5.1(a)(ii), attach annual report; in the case of a Compliance Certificate
delivered pursuant to Section 6.5, attach a Monthly Report in the form of
Exhibit VII.]
EXHIBIT V
FORM OF COLLECTION ACCOUNT AGREEMENTS
Form of Lock-Box Agreement
(Attached)
Form of Custodial Agreement
(Attached)
EXHIBIT VI
FORM OF CONTRACT(S)
(Attached)
EXHIBIT VII
FORM OF MONTHLY REPORT
(Attached)
EXHIBIT VIII
FORM OF WEEKLY REPORT
(Attached)
EXHIBIT IX
FORM OF JOINDER AGREEMENT
Dated as of [________ __, 20__]
Reference is made to the Second Amended and Restated
Receivables Purchase Agreement dated as of January 17, 2003 (as amended,
restated, supplemented or otherwise modified from time to time, the "Purchase
Agreement"), among The Bon-Ton Receivables Partnership, L.P. (the "Seller" and
the "Collection Agent"), BTRGP, Inc., each financial institution party thereto
as an Investor (the "Investors"), Falcon Asset Securitization Corporation and
EagleFunding Capital Corporation, as Conduits (the "Conduits"), Bank One, NA
(Main Office Chicago) ("Bank One") and Fleet Securities, Inc., as Managing
Agents (the "Managing Agents"), and Bank One, as Agent (the "Agent"). To the
extent not defined herein, capitalized terms used herein have the meanings
assigned to such terms in the Purchase Agreement.
[__________________] (the "New Managing Agent"),
[__________________] (the "New Conduit"), [__________________] (the "New
Investor"), the Seller, the Agent and the Managing Agents agree as follows:(1)
1. The New Managing Agent, the New Conduit and the New
Investor are to become a Managing Agent, a Conduit and an Investor,
respectively, under the Purchase Agreement.
2. The effective date (the "Effective Date") of this
Joinder Agreement shall be the later of (i) the date on which a fully executed
copy of this Joinder Agreement is delivered to the Agent, and (ii) the date of
this Joinder Agreement.
3. By executing and delivering this Joinder Agreement,
each of the New Managing Agent, the New Conduit and the New Investor (i)
confirms that it has received a copy of the Purchase Agreement and such other
documents and information requested by it, and that it has, independently and
without reliance upon the Seller, any Managing Agent, the Agent or any
Purchaser, and based on such documentation and information as it has deemed
appropriate, made its own decision to enter into this Joinder Agreement; (ii)
agrees that it shall, independently and without reliance on the Seller, any
Managing Agent, the Agent or any Purchaser, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Purchase Agreement;
(iii) appoints and authorizes the Agent to take such action on its behalf and to
exercise such powers and discretion under the Purchase Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (iv) agrees that it
------------------
(1) This form contemplates the addition of one new Managing Agent, one new
Conduit and one new Investor as parties to the Purchase Agreement. Appropriate
changes to this form will be necessary if only Investors (and no new Managing
Agent) will be added, or if more than one Conduit and/or Investor will be added.
shall perform in accordance with their terms all of the obligations that by the
terms of the Purchase Agreement are required to be performed by it as a Managing
Agent, a Conduit and an Investor, respectively; (v) specifies as its notice
address, for purposes of Section 11.2 of the Purchase Agreement, the office set
forth beneath its name on Schedule I to this Joinder Agreement; and (vi), in the
case of the New Conduit and the New Investor, appoints and authorizes the New
Managing Agent as its Managing Agent to take such action as agent on its behalf
and to exercise such powers under the Purchase Agreement as are delegated to the
Managing Agents by the terms thereof.
4. On the Effective Date of this Joinder Agreement (i)
each of the New Managing Agent, the New Conduit and the New Investor shall join
in and be a party to the Purchase Agreement and shall have the rights and
obligations of a Managing Agent, a Conduit and an Investor, respectively, under
the Purchase Agreement; (ii) the Commitment of the New Investor shall be set
forth opposite such New Investor's name on Schedule I hereto; and (iii) the
Purchase Limit shall be increased by an amount equal to the New Investor's
Commitment.
5. This Joinder Agreement may be executed by one or more
of the parties on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
6. This Joinder Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Illinois.
IN WITNESS WHEREOF, the parties hereto have caused this
Joinder Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule I hereto.
* * * * *
2
Schedule I
to
Joinder Agreement
Dated as of [________ __, 20__]
[NEW MANAGING AGENT]
By:_______________________
Name:
Title:
Address and facsimile for notices:
[Address]
[Facsimile]
[NEW CONDUIT]
By:_______________________
Name:
Title:
Address and facsimile for notices:
[Address]
[Facsimile]
[NEW INVESTOR] COMMITMENT: $[____________]
By:_______________________
Name:
Title:
Address and facsimile for notices:
[Address]
[Facsimile]
S-1
CONSENTED to this ___ day of ___________, 20__ by:
BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Managing Agent and as Agent
By:_______________________
Name:
Title:
FLEET SECURITIES, INC.,
as a Managing Agent
By:_______________________
Name:
Title:
THE BON-TON RECEIVABLES PARTNERSHIP, L.P.,
as Seller
By: BTRGP, INC., its General Partner
By:_______________________
Name:
Title:
S-2
EXHIBIT X
FINANCIAL COVENANT DEFINITIONS
As used in connection with Section 7.1(i) of this Agreement
(as defined in Exhibit I), the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Administrative Agent" shall mean GE Capital or its successor
appointed pursuant to the Credit Agreement.
"Agents" shall mean, collectively, the Administrative Agent
and the Collateral Agent.
"Borrower Representative" shall mean The Bon-Ton Department
Stores, Inc., in its capacity as Borrower Representative under the Credit
Agreement.
"Borrower" means The Bon-Ton Department Stores Inc., Xxxx,
Xxxxxxx & Xxxxxxxx Co., Inc. and The Bon-Ton Stores of Lancaster, Inc.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures (by the expenditure of cash or the incurrence of Indebtedness)
by such Person during any measuring period for any fixed assets or improvements
or for replacements (other than any repair or replacement of a property to the
extent from insurance proceeds covering such property), substitutions or
additions thereto, that have a useful life of more than one year and that are
required to be capitalized under GAAP.
"Capital Lease" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease of any Person, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such lessee in respect of such Capital Lease.
"Charges" shall mean all federal, state, county, city,
municipal, local, foreign or other governmental taxes (including taxes owed to
the Pension Benefit Guaranty Corporation, or any successor thereto, at the time
due and payable), levies, assessments, charges, liens, claims or encumbrances
upon or relating to (a) the Collateral, (b) the Obligations, (c) the employees,
payroll, income or gross receipts of any Credit Party, (b) any Credit Party's
ownership or use of any properties or other assets, or (e) any other aspect of
any Credit Party's business.
"Closing Checklist" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Credit Agreement, the other
Loan Documents and the transactions contemplated thereunder, substantially in
the form of Annex D to the Credit Agreement.
"Code" shall mean the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of the Administrative Agent's or any
Lender's security interest in any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term "Code" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
hereof and the Security Agreement relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"Collateral" shall mean the property covered by the Security
Agreement, the Mortgages and the other Collateral Documents and any other
property, real or personal, tangible or intangible, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of the Administrative Agent, on behalf of itself, the other Agent
and the Lenders, to secure the Obligations, provided however, that the
Collateral shall not include any "Designated Asset" as that term is defined in
the Intercreditor Agreement.
"Collateral Agent" shall mean GE Capital or its successor
appointed pursuant to the Credit Agreement.
"Collateral Documents" shall mean the Security Agreement, the
Pledge Agreement, the Guaranty, the Mortgages, the Trademark Security
Agreements, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Credit Agreement" shall mean that certain Credit Agreement,
dated as of April 15, 1997, by and among The Bon-Ton Department Stores Inc.,
Xxxx, Xxxxxxx & Xxxxxxxx Co., Inc. and The Bon-Ton Stores of Lancaster, Inc., as
Borrowers, certain Credit Parties named therein, The First National Bank of
Boston, as a Lender and the Collateral Agent, General Electric Capital
Corporation, as a Lender and as the Administrative Agent and the other Lenders
party thereto from time to time, as such Credit Agreement is in effect on the
date hereof, and giving effect only to amendments or modifications thereto that
are approved of in writing by each Managing Agent.
"Credit Parties" shall mean Parent, The Bon-Ton Corp., each
Borrower, The Bon-Ton National Corp. and The Bon-Ton Trade Corp.
"EBITDA" shall mean, with respect to any Person for any fiscal
period, an amount equal to (a) consolidated net income of such Person for such
period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets by such Person (including any fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets and all securities), and (v) any other non-cash
gains which have been added in determining consolidated net income, in each case
to the extent included in the calculation of consolidated net income of such
Person for such period in accordance with GAAP, but without duplication, plus
(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from
2
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication. For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a Person: (1) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of
cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"Fees" shall mean any and all fees payable to Agents or any
Lender pursuant to the Credit Agreement or any of the other Loan Documents.
"Fiscal Quarter" shall mean a fiscal quarter of Parent and its
Subsidiaries for financial accounting purposes.
"Fixed Charges" shall mean, with respect to any Person for any
fiscal period, the aggregate of all Interest Expense paid or accrued during such
period plus (a) scheduled payments of principal with respect to Indebtedness
during such period, excluding payments under any revolving credit facility, any
balloon payments on any mortgage or any other debt which is refinanced, plus (b)
Capital Expenditures (other than Special Capital Expenditures) funded with cash
proceeds other than cash proceeds of Indebtedness permitted under clause (a)(vi)
of Section 6.3 of the Credit Agreement during such period, plus (c) cash taxes
actually paid during such period.
"Fixed Charge Coverage Ratio" shall mean, with respect to any
Person for any fiscal period, the ratio of EBITDA to Fixed Charges.
"FNBB" shall mean The First National Bank of Boston, a
national banking association.
3
"FNBB Fee Letter" shall mean that certain letter, dated as of
January 24, 1997, between FNBB and Borrowers with respect to certain Fees to be
paid from time to time by Borrowers to FNBB.
"Funded Debt" shall mean, with respect to any Person, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and which by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long-term debt, revolving credit and short-term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Borrowers, the Obligations.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect on April 15, 1997, consistently
applied as such term is further defined in Annex G to the Credit Agreement.
"GE Capital" means General Electric Capital Corporation, a New
York corporation.
"GE Capital Fee Letter" shall mean that certain letter, dated
as of January 24, 1997, between GE Capital and Borrowers with respect to certain
Fees to be paid from time to time by Borrowers to GE Capital.
"Guaranty" shall mean that certain guaranty, dated as of April
15, 1997, executed by each of Parent, The Bon-Ton Corp., The Bon-Ton National
Corp. and The Bon-Ton Trade Corp. in favor of the Administrative Agent, on
behalf of itself, the other Agent and the Lenders.
"Indebtedness" of any Person shall mean without duplication
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred six (6) months or more,
but excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract
4
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement, dated as of April 15, 1997, executed by The First
National Bank of Chicago, The Bon-Ton Department Stores, Inc., The Bon-Ton
Receivables Partnership, L.P. and the Administrative Agent.
"Interest Expense" shall mean, with respect to any Person for
any fiscal period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such date,
including, in any event, interest expense with respect to any Funded Debt of
such Person.
"Lenders" shall mean GE Capital, FNBB, the other Lenders named
on the signature page of the Credit Agreement, and, if any such Lender shall
decide to assign all or any portion of the Obligations, such term shall include
such assignee.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction) functionally equivalent to
a lien or security interest.
"Loan Documents" shall mean the Credit Agreement, the Notes,
the Collateral Documents, the FNBB Fee Letter, the GE Capital Fee Letter, the
Intercreditor Agreement and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, the Administrative Agent and/or the Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Credit Party, or any employee of any Credit Party, and delivered
to the Administrative Agent or any Lender in connection with the Credit
Agreement or the transactions contemplated hereby. Any reference in the Credit
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to such agreement as
the same may be in effect at any and all times such reference becomes operative.
"Mortgaged Properties" shall have the meaning assigned to it
in Annex D of the Credit Agreement.
"Mortgages" shall mean each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents delivered by any Credit Party to the
Administrative Agent with respect to the Mortgaged Properties, all in form and
substance satisfactory to the Administrative Agent.
"Notes" shall mean the Revolving Notes and the Swing Line
Notes, collectively.
5
"Obligations" shall mean all loans, advances, debts,
liabilities and obligations, for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated or determinable) owing by
any Credit Party to Agents or any Lender, and all covenants and duties regarding
such amounts, of any kind or nature, present or future, whether or not evidenced
by any note, agreement or other instrument, arising under the Credit Agreement
or any of the other Loan Documents. This term includes all principal, interest
(including all interest which accrues after the commencement of any case or
proceeding in bankruptcy after the insolvency of, or for the reorganization of
any Credit Party, whether or not allowed in such proceeding), Fees, Charges,
expenses, attorneys' fees and any other sum chargeable to any Credit Party under
the Credit Agreement or any of the other Loan Documents.
"Parent" means The Bon-Ton Stores, Inc., a Pennsylvania
corporation.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof).
"Pledge Agreement" shall mean that certain Pledge Agreement,
dated as of April 15, 1997, executed by each of Parent, The Bon-Ton Corp., The
Bon-Ton Department Stores, Inc. and The Bon-Ton National Corp. in favor of the
Administrative Agent, on behalf of itself, the other Agent and the Lenders.
"Revolving Note" shall mean those certain promissory notes,
dated as of April 15, 1997, executed by each Borrower in favor of each Lender.
"Security Agreement" shall mean that certain Security
Agreement, dated as of April 15, 1997, entered into among the Administrative
Agent, on behalf of itself, the other Agent and the Lenders, and each Credit
Party that is a signatory thereto, as such Security Agreement is in effect on
the date hereof, and giving effect only to amendments or modifications thereto
that are approved of in writing by each Managing Agent.
"Special Capital Expenditures" shall mean capital expenditures
made with net proceeds derived from a public offering of common stock by Parent
and which is transferred to a Borrower as equity. Special Capital Expenditures
shall be designated by Borrower Representative and generally will include store
expansions and new stores.
"Stock" shall mean all shares, options, warrants, general or
limited partnership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership or equivalent entity whether
voting or nonvoting, including common stock, preferred stock or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended).
6
"Subsidiary" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person and/or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
"Swing Line Note" shall mean those certain promissory notes,
dated as of April 15, 1997, executed by each Borrower in favor of each Swing
Line Lender.
"Trademark Security Agreements" shall mean those certain
Trademark Security Agreements, dated as of April 15, 1997, made in favor of the
Administrative Agent, on behalf of itself, the other Agent and the Lenders, by
each applicable Credit Party.
7
SCHEDULE A
CLOSING LIST
(Attached)
SCHEDULE B
COLLECTION ACTIVITIES DELEGATED BY THE SUBSERVICER
USA Direct: Contact: Xxxxx Xxxxxx
Address: 0000 Xxxxxxxxxxx Xxxx
Xxxx, XX 00000
Phone: 1-800-441-1850 ext. 3074
Production Services Associates: Contact: Xxxxxxx X. Xxxxxx
Address: 0000 Xxxxxxxxx Xxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Regulus: Contact: Xxxx Xxxx (Site Manager)
Address: 0000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
